Posted: October 15, 2009
Montpelier, Vt. – Chief Recovery Officer Tom Evslin reported by teleconference to the General Assembly today that $55,966,939 of American Recovery and Reinvestment Act (ARRA) funds reimbursed to Vermont State government by Washington created or retained 1990.86 “direct” jobs in the state.
The preliminary numbers were produced using detailed federal guidelines which state that “jobs” are full time equivalents (FTEs) calculated from payroll data, that is, two half time workers during the reporting period count as one FTE. These numbers are taken from 51 reports submitted by Office of Economic Stimulus and Recovery (ESR) to the federal Office of Management and Budget (OMB) as part of the required “1512” reporting. The reports may be corrected by the state until they are made public on October 30 and Evslin predicted that there will be corrections.
Direct jobs created with these funds are the positions counted for today’s reporting purposes. That means that the people working “directly” on a bridge project are counted however “indirect” jobs like the people who made the steel used in the bridge, and “induced” jobs, like the people who work in the stores where the bridge workers and steel makers are able to shop because they have jobs are not counted.
Federal projections of ARRA impact do include direct, indirect, and induced jobs which means state reports reflect only a portion of the jobs actually created or retained by ARRA. Neither the states nor the federal government distinguish between jobs created and jobs retained.
The State of Vermont reported 510.8 jobs in a program run by the Department of Labor for dislocated and disadvantaged workers including youth. Highway construction accounted for 474.61 jobs.
State Fiscal Stabilization Funds (SFSF), a part of ARRA given to states to shore up their budgets in a time of declining revenue, paid for 421.4 jobs in public safety and 375.12 in local school districts.
However, Evslin cautioned that it is highly unlikely that all the teachers and public safety officials whose positions were paid with SFSF funds would have been terminated if the ARRA funds were not available. “The State would almost certainly have funded these positions even if the ARRA money wasn’t available or had been used elsewhere,” he said.
Evslin continued “without SFSF and Medicaid funding to help Vermont fill massive deficits caused by the recession, there would likely have been more layoffs throughout state government and perhaps even higher taxes. Even with these funds, we still face the challenge of how we are going to fund these positions a year from now when the ARRA funds dry up and revenues still have not rebounded to previous levels.”
The State has received an additional $120,974,211 in other stimulus funding which is not subject to 1512 reporting and for which job estimates are not prepared by the states; almost $105 million of this was reimbursement for Medicaid expenses.Moreover, organizations which receive ARRA grants and loans directly from the federal government are required to report directly to OMB; information they filed will also become public on October 30 but is not available to State officials until then. No reports are required from individuals who received ARRA tax cuts or credit or from other individual beneficiaries.
Some of this funding indubitably produced indirect and induced jobs as did the money allocated by the State for Economic Development. For example, Vermont Economic Development Authority estimated that 563 jobs have been impacted by the ARRA-funded interest rate buydown which is part of Governor Jim Douglas’ SmartVermont program. These jobs are not reportable under federal 1512 guidelines.
Although reports from other states are not yet available, Evslin predicted that Vermont will compare favorably in how quickly it put stimulus money to work creating jobs. “We know, for example, that VTRANs has gotten projects out and going faster than most other states – even other cold weather states. We deliberately used federal money before state money to pay salaries and for other expenses to reduce the amount the state needs to borrow to save interest dollars as well as to meet the intent of ARRA that this money be put to work quickly. Our agencies overall have done a good job of establishing or expanding programs quickly.”
Quarterly ARRA job counts from all states will eventually decline as the money is spent. They may also decline from quarter to quarter due to seasonal factors like the end of the construction season and the termination of summer jobs.
The legislative teleconference was arranged by Senator Jane Kitchel and Representative Janet Ancel and the Joint Fiscal Office. Kitchel and Ancel are the legislative liaisons to the Office of Economic Stimulus and Recover; they meet biweekly with ESR when the legislature is not in session and weekly during the session to ensure close coordination between the Administration and the Legislature on the implementation and use of ARRA funds.