Stimulus money flows into Colorado, putting some to work, angering others
Thursday, September 23, 2010 at 1:18 am
You may love it or you may hate it. Some complain that it is too big; others say it has not gone nearly far enough. One thing that is hard to argue, though, is that it has pumped billions of dollars into the Colorado economy. The American Recovery and Reinvestment Act, otherwise known as the stimulus, has been at least partly responsible for construction jobs all over the state.
The governor’s office says the Act has resulted in $7.3 billion in federal spending in Colorado, saving or creating 50,000 jobs, according to The White House Council of Economic Advisors (pdf). Projects range from loan guarantees that help Colorado businesses grow to grants awarded to small non-profits. The claim of 50,000 jobs is hard to prove and has been disputed, with some estimates saying fewer than 10,000 jobs have been created, many of them short-term.
Ritter spokeswoman Myung Oak Kim said it is impossible to know how many jobs have been saved or created. She said the White House number also includes jobs “induced,” which she defined as created indirectly, i.e. service sector jobs that exist because other jobs exist.
She said every recipient of stimulus money has to report to the government how many jobs were created or saved. That number, she said, is about 18,000 FTEs (full-time equivalents). She noted, though, that only about a third of the money goes toward projects that come under that reporting, with the rest going to tax cuts, extended unemployment, etc.
About 50 percent of the money allocated for Colorado has been spent so far, she said. “As more money is spent, employment will continue to go up because of this.”
Many of the jobs that have been created tie in with Gov. Bill Ritter’s agenda of creating a green energy hub in Colorado. Abound Solar, in Longmont, received $400 million in loan guarantees that enabled the company to expand production of thin-film photovoltaic modules. While Democrats tout the $400 million number, probably only about $100 million of it will be invested in Colorado, the rest being invested in expanding operations in Indiana.
“The DOE loan guarantee is essential to helping companies like Abound Solar scale up innovations in photovoltaic manufacturing that are critical to reducing the cost of alternative energy,” said Abound President and CEO Tom Tiller.
The governor’s office says a large majority of the funds are going for such things as tax cuts and tax credits for individuals and businesses as opposed to large bricks and mortar projects. A lot of it is also going to social service type programs (pdf) such as increased food stamp benefits and additional unemployment insurance payments.
“The Recovery Act has been a lifeline for Colorado,” said Ritter said through a spokesperson. “It is providing a sensible balance of tax relief, increased safety net benefits for struggling families and investment in important infrastructure projects that will have lasting benefits for communities across Colorado. The Recovery Act has saved or created tens of thousands of jobs.”
Jon Caldera, president of the Independence Institute, is one of the people not that happy about the stimulus. “It’s a terrific thing,” he said with his trademark sarcastic chuckle. “It has taught me how to use my children’s credit cards more effectively. Each of my children is already in debt $44,000 dollars on the federal side alone, so what’s a little more?
“There is no way that running up our debt is a good thing,” he said. “This is inter-generational theft, and it is reprehensible. Anyone caught within a mile of the stimulus bill should be publicly flogged,” he said.
The Colorado Independent called or emailed all three candidates for governor, but none responded to a request for comment. American Constitution Party candidate Tom Tancredo has been an outspoken critic of the spending bill.
Crossroads Safehouse is a good example of how money is being used to expand or strengthen the social safety net. The 30-year-old Larimer County non-profit, which provides housing and other services for victims of domestic violence, received a $500,000 grant spread over three years. The money has allowed the safe house to provide more services to more people for longer periods of time.
Prior to receiving the funds, Crossroads had funds for 15 transitional living units for women or families that were able to leave the safe house and begin transitioning back into mainstream society. Now they have money for 25 such units.
Executive Director Vicky Lutz explained that Crossroads does not own living units but helps women pay their rent as they get back on their feet, going to school or looking for work. The additional money has helped with bilingual services, education and childcare as well. She said the center had 436 residents last year and served a total of 2,600 people.
Another social services recipient of funds was the Denver Housing Authority, which received $10 million toward the construction of a $21 million, 100-unit public housing facility at 1099 Osage. The city will break ground on the building Sept. 27. It will be built with geothermal heating and cooling as well as active and passive solar.
Even when it does come to construction projects, many of them are small, impacting small communities and small businesses that receive contracts, often for infrastructure improvements.
One such project was in Hot Sulphur Springs, which — without much money — was in hot water. Two years ago the state issued a “boil water” order in the small Grand County town. The town’s water fund contained just over $160,000 at the time. The work needed was in the millions. Because of the stimulus, Hot Sulphur got the money. “It was a godsend to us,” Mayor Hershal Deputy told the local Ski Hi Daily News (pdf).
The $3.3 million loan, $2 million of which was forgiven and the rest of which was loaned without interest, was a godsend to more than the town.
Self-employed Littleton engineer Ed Duerr told the Colorado Independent the recession had hit him very hard. The Hot Sulphur project did more than keep his business above water. He says it provided him with the opportunity to work on an innovative project that will help people for many years.
“I wasn’t sure what I was going to be doing at the time, and my usual business partners had been hit hard as well. We were all scrambling. I know that a lot of people on this project were very glad when funding came through. There are a number of people, including myself, who have been working either part-time or full-time for over a year on this one project. At the end of the day, the stimulus was a very real deal for me and my business,” Duerr said.
He said the other companies he worked with — Merrick and Company and Garney Companies — were from Colorado as well. A “buy American” clause in the contract, he says, meant lots of business for other companies as well, including Siemans, which manufactured components for the project in Colorado Springs.
“A lot of folks in Colorado got a nice share of this one small stimulus project,” he said.
Lots of people have probably driven 6th Avenue between Kipling and Simms and wondered about all the solar panels going up on previously vacant land to the north. Bingo, it’s stimulus money, this time being spent at the Denver Federal Center. The $39.4 million project currently employs 39 people from seven contractors, five of which are small businesses or disadvantaged small businesses.
Altogether, this solar installation will save the federal government between $600,000 and $700,000 a year in energy costs.
The Denver solar project is the largest single part of GSA’s effort to add 12 megawatts of solar power generation capacity at federal buildings nationwide — increasing solar power capacity by nearly 600 percent while generating enough renewable electricity to power 1,600 homes — the equivalent of removing 2,500 cars from the road, according to a spokesperson at GSA.
UQM Technologies, in Frederick, received $45 million in stimulus funding to expand its facilities and ramp up production of electric vehicle propulsion systems. The company expects to grow from 70 jobs to 230, all in Colorado.
The $500 million redevelopment of Denver’s Union Station has been boosted by a $28 million grant from ARRA. That project will be complete in 2014.