Opinion: Coronavirus stimulus money too important to be spent stupidly


ANALYSIS/OPINION

By David Avella | Fox New Opinion
March 31, 2020

With President Trump and Congress making billions of dollars available to state and local governments to care for the sick and save jobs, there is too much is at stake for there to be anything that resembles politics as usual.

This is not the time to return to the years of President Barack Obama, especially when it comes to spending federal stimulus dollars.

It was stimulus money given out by President Obama and the Democratic-led Congress that allowed state and local politicians to play fast and loose to achieve political gains. And sadly, with the recent passing of former U.S. Senator Tom Coburn, Americans taxpayers have lost a champion for pointing out when politicians fail to be smart in spending precious dollars.

Senator Coburn alerted us to some of the foolishness surrounding spending Obama-era stimulus dollars.

In Colorado, local Denver officials had trees planted in its wealthiest neighborhoods as part of a $600,000 stimulus project.

In Nevada, a wood-burning power plant that eventually closed received $620,000 in stimulus funds.

In Oklahoma, local Boyton officials used almost $90,000 to replace a new sidewalk with a newer sidewalk that lead to a ditch.

As if those three examples were not bad enough, there were plenty more. In Kansas, state lawmakers spent federal stimulus funds to renovate and upgrade their own offices and the statehouse.

In Ohio, the Department of Transportation spent $1 million on signs advertising that infrastructure spending was paid for by the stimulus. Ohio was not alone, as Pennsylvania spent $140,000, New York spent $100,000, and Colorado spent $55,000.

On top of the questionable spending, politicians used stimulus dollars to support basic functions of state and local governments as revenues declined from the weak economic activity at that time. When the dust settled, state and local governments were never held accountable for their conduct.  In other words, tax dollars taken from the federal Treasury became the slush fund to prevent politicians from facing the music.

It was this kind of outlandish spending that led 3 of 4 Americans to tell researchers that much of the Obama-era stimulus money was wasted.

That cannot happen this time.

The dollars involved are breathtaking in the CARE Act of 2020. There’s the  $150 billion Coronavirus Relief Fund for state, local, and tribal governments. There is $30 billion for Education Stabilization Fund for states, school districts and institutions of higher learning.  There is $45 billion for the Disaster Relief Fund for the immediate needs to help them respond and recover from the overwhelming effects of COVID-19. Then there’s $1.4 billion for deployments of the National Guard. $500 billion lending fund for businesses, cities, and states. And a $260 billion investment into the unemployment insurance program. The list goes on, but the picture is clear. Never before has anything of this magnitude been done.

As we work our way out of the COVID-19 crisis, the double whammy of reduced revenues and increased costs for state and local programs will need to be confronted once more.  This calls for the elected leaders to both be responsible and smart with the dollars they are receiving.

For example, $13.5 billion is available for formula grants to states (from the $30 billion total dedicated to education) which will then distribute 90 percent of what they receive to local educational agencies. States should insist that the maximum possible number of dollars go to instruction and not to administrative costs. We know now, more than ever, that instruction is not limited to the classroom. Now is the time to increase the technology utilized in education to get a bigger bang for our buck.

States and local governments receiving dollars from the $500 billion lending fund must be thinking in terms of spending taxpayer dollars the intelligent and proper way. It will be a new world once we return to lives resembling what we consider normal.

Simply stated, throwing good money after bad is not a winning formula.  Rebuilding confidence is going to require a more broad-based approach that deals with the job situation.

It will also require restoring consumer confidence and private investment to get market performance, growth rates and interest rates showing a strong, comprehensive economy.

Our elected leaders are staring at some tough times and hard decisions, just as is the case for all of us.

Hundreds of billions of federal dollars are now available to help ease the pain. State and local leaders owe us two things: Spend the dollars for the purposes intended and be as smart as possible in doing it.

This should not be too much to ask.

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