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ANALYSIS: Missouri agencies move forward with stimulus despite disagreements

Monday, April 27, 2009 | 12:01 a.m. CDT

JEFFERSON CITY — State lawmakers and Gov. Jay Nixon can't agree on how to spend half of Missouri's federal economic stimulus package, but government agencies already are moving to get the other half out the door.

Last week, as House Republicans outlined yet another idea for using the federal money, the Department of Natural Resources already was accepting public comments on its proposal to distribute stimulus money for home energy efficiency projects.

The Natural Resources Department expects to receive about $128 million for home energy efficiency from the U.S. Department of Energy and must submit a plan to the federal government by May 12 for how it will use that stimulus money.

The state agency wants to distribute 60 percent of the money through its existing funding formula to the 18 local agencies that help low-income Missourians make their homes energy efficient. It proposes to distribute 20 percent based on the agencies' performance and 20 percent based on the ability of local agencies to leverage additional funding sources for multifamily and neighborhoodwide projects.

DNR Energy Center director Anita Randolph said officials began planning how to use the home energy efficiency money shortly after President Barack Obama signed the federal stimulus package into law on Feb. 17.

The Department of Natural Resources wasn't the only agency to get a quick start.

As Obama signed that bill in Denver, the Missouri Highways and Transportation Commission met on a cold and overcast day beside a crumbling Great Depression-era bridge over the Osage River in Tuscumbia. Watching a satellite feed of Obama's signing ceremony, the commission immediately awarded a contract to begin work on replacing the bridge.

Missouri expects to get more than $4 billion in federal stimulus money. Of that, about half is earmarked for specific purposes, such as transportation and home energy efficiency projects. The other roughly $2 billion in "budget stabilization" funds has more flexibility and allows for Nixon and lawmakers to set priorities.

But disagreement between lawmakers and Nixon's administration and between House and Senate leaders has slowed the planning for how to spend the $2 billion in "budget stabilization" money.

The Senate has proposed to use just under $1 billion to support state programs in next year's budget while saving the rest for later.

Nixon initially called for spending more than $800 million in next year's budget and later asked for an additional $200 million to create an economic development fund.

House leaders, meanwhile, have changed gears several times.

Last month, the House included several hundred million dollars of "budget stabilization" funds in the state's proposed operating budget.

Last Monday, the House Budget Committee approved spending hundreds of millions of additional dollars on scores of projects ranging from parking garages to social service programs.

But on Wednesday, House Republicans meeting in a closed-door caucus expressed concerns about excessive state spending.

"We made a determination that we just weren't going to do that," said House Speaker Ron Richard, R-Joplin. "So we changed, we pivoted."

On Thursday, Republican House leaders outlined a new plan for the federal money: allotting $1 billion for a two-year tax cut; saving roughly $500 million for future years; and spending more than $300 million on projects ranging from new buildings and a Highway Patrol radio system to ethanol plant subsidies and higher payments to social service providers.

Lawmakers have until May 8 to pass spending bills.

Richard said the House is experimenting.

"We're doing things a little bit different," he said. "We've never had this kind of money before and we want to do it wisely."

The House doesn't have the final say over how the "budget stabilization" funds will be spent. And others aren't necessarily ecstatic with the new proposals.

"The budget ideas from the House Republicans are kind of like the weather in Missouri," Nixon spokesman Scott Holste said. "There's no need to spend too much time worrying about it, because it will likely change in an hour or so."

The bickering has been more apparent in the Legislature. But there also have been disagreements as state agencies begin using the earmarked stimulus money.

The Department of Natural Resources' plan to award some of the energy efficiency money based on specialized criteria was criticized by officials from numerous community action agencies who testified at a public hearing Friday.

And St. Louis Mayor Francis Slay has feuded with MoDOT over the transportation projects that will be funded, suggesting his area is not getting a large enough share.

Although sizable, the federal stimulus money is limited. So the elbowing for a share has been intense — whether to increase spending or cut taxes; whether to replace a crumbling country bridge or fix urban roads; or whether to distribute money to local agencies by a formula or competition.

"I feel like I have an obligation to say what I feel is a fair use of the funds," said Terry Sanders, of West Plains-based Ozark Action Inc., who was one of several pushing for changes on how energy efficiency money is spent.


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