February 18, 2009 in Business

For region, upshot of stimulus funds uncertain

White House says jobs are coming, but some remain skeptical
By The Spokesman-Review

White House officials are predicting the massive $787 billion stimulus bill signed by President Barack Obama on Tuesday will create or save 8,000 jobs in Eastern Washington and another 9,000 jobs across north and central Idaho.

But one regional economist said the numbers and the report that produced them were “vapor” economics. Job creation on this scale is hard to calculate, said Avista Corp. chief economist Randy Barcus.

“These numbers and predictions are really just politics and not good economics,” said Barcus.

The White House report also fails to identify a timeline or starting point to track job growth – or jobs saved – now that the bill has become law, he said.

Following Obama’s signing of the 1,037-page bill Tuesday, state officials and business leaders said they hope the legislation’s tax credits and direct investments will revive staggering economies.

The White House report predicts 3.5 million jobs will be saved or created nationwide over the next two years. Industries expected to see big job impacts are health care, energy and education, the report said.

David Bunting, an economics professor at Eastern Washington University, said the White House jobs numbers are based on a model that predicts that every dollar spent in direct investment can generate $1.20 to $1.50 in economic growth, “depending on how the money is spent,” Bunting said.

Spokane Neighborhood Action Programs expects a boost from the money set aside for weatherizing homes.

The agency has three auditors who help set up low-income homes for weatherization. It also has 12 workers who do the weatherization work, said Chris Davis, SNAP’s director of housing improvements.

The stimulus bill will nearly double the money SNAP has available for low-income home weatherization. That will create at least 10 more SNAP jobs, and maybe additional hiring of outside contractors to do some of the work, Davis said. The stimulus bill also should spur home improvements for residents who add energy-efficient windows, furnaces and air conditioners: A new tax credit will cover 30 percent of the costs, up to $1,500.

Federal budget watchers say education and criminal justice should see significant job creation or retention.

About $1.6 billion of the package will go to state and local law enforcement or programs to help crime victims. About $1 billion of that will go toward hiring police officers. Another $225 million is set aside for tribal law enforcement programs.

Many state education advocates say they welcome the $54 billion in the package that will offset or restore state education budget cuts that have started or would have occurred over the next two years.

About $39 billion in the stimulus package will go toward kindergarten through 12th grade and higher education programs, according to the federal report.

Rep. Cathy McMorris Rodgers, the Republican lawmaker who represents Washington’s 5th Congressional District, voted against the stimulus bill. She said in an interview Tuesday she’s not convinced it’s a wise use of money.

“We’ve been given a lot of different numbers on the impact, throughout the debate. But it begs the question – why are we spending about $250,000 of government money for each job created?” she said.

Rep. Walt Minnick, an Idaho Democrat representing that state’s 1st District, also voted against the bill.

He didn’t want to quibble about job numbers Tuesday, though. Through a spokesman, Minnick said it’s more important that government leaders act now rather than later to help consumers, homeowners and business owners. Minnick said the scorecard on new jobs is important but not the only way to measure the bill’s impact.

Contact Tom Sowa at toms@spokesman.com or (509) 459-5492.

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