States face competing priorities for stimulus cash-WEB ONLY

It may sound like a nice problem for states – figuring out how to spend the billions in infrastructure funding they’ll receive as part of President Barack Obama’s economic stimulus plan.

But the task is more complicated than it seems, as state officials try to set priorities while managing competing pressures from communities, watchdog groups and federal regulators over how the money is allocated.

Under the plan Obama is expected to sign into law early this week, states will divide $27 billion to build and repair roads and bridges. That is less than half the $64 billion in projects states told the American Association of State Highway and Transportation Officials late last year that they had ready to go.

The law also requires that half the money be spent on projects that have been vetted by the federal government and deemed “ready to go” in 120 days, as a way to jolt the economy and create jobs. That means state officials are under pressure to make decisions quickly on which projects to fund and which to bypass.

Indiana is expected to get about $4 billion in stimulus money. The state has identified about 27 road-construction projects that are likely to be deemed shovel-ready.

While many states have made their lists of “ready-to-go” infrastructure projects available online for public review, others have resisted, in part because the limited stimulus funding means only a fraction of the projects will receive money.

Watchdog groups say it’s likely that state officials fear angering constituents if a project appears on a wish list and then is struck from the final allocation.

“There will be huge internal battles in states about priorities,” said Phineas Baxandall of the Public Interest Research Group.

In California, for example, Gov. Arnold Schwarzenegger’s office rejected a request by The Associated Press for a detailed list of “ready-to-go” projects. The AP sought the information under the California Public Records Act, but the governor’s office last week said the documents were internal drafts, adding “disclosure would chill critical communications to and within the Governor’s Office, thereby harming the public interest.”

The sheer volume of money directed toward state projects has fueled calls for transparency, with journalists, interest groups and others demanding a full accounting of which projects receive the funding, which are rejected, and why.
Massachusetts Gov. Deval Patrick addressed that sentiment last week when he named a local real estate developer to oversee bidding for the stimulus money. Patrick also set up a new Web site with information on every project that receives the money.

“I don’t want to send a mistaken impression there are pet projects,” Patrick said.
The governor appeared with the state’s attorney general, Martha Coakley, who also will help track the stimulus funds.

“An ounce of prevention in handling the money is worth a pound of grand jury investigations and civil litigation down the road,” Coakley said.

Mindful of the accelerated timetable they face, states are moving quickly to develop mechanisms for identifying priority projects and disbursing funding for them.

Some have created oversight commissions while others are leaving decisions to state transit officials. Some are required by law to involve state legislators, while legislators in states that don’t require their participation are pressing to have input.

Ohio Gov. Ted Strickland, a Democrat, has retained a former U.S. diplomat as a temporary, unpaid “infrastructure czar.” But the Republican-controlled Senate, concerned that Strickland could try to push stimulus funding through the state’s Controlling Board instead of through the legislature, has drawn up a separate “spending blueprint” for the federal stimulus money.

Alabama Gov. Bob Riley, a Republican, has hired two former state finance officials to oversee the stimulus money. New Hampshire Gov. John Lynch, a Democrat, tapped a former attorney general to manage the funds, while Wisconsin Democratic Gov. Jim Doyle established a state Office of Recovery and Reinvestment led by the president of a local electric utility and a vice chancellor of the University of Wisconsin.

In Virginia, Gov. Tim Kaine, a Democrat, is taking a grass-roots approach, setting up a Web site seeking input from residents, local governments and community groups as to how the money should be spent. Nearly 600 suggestions poured in on the first day alone, state officials said.

In Colorado, 11 transportation commissioners will determine which projects to fund, in part based on recommendations from local governments and city planners around the state. No vote of the legislature is needed to spend the money.

Legislative input also is not required in Maine, but state lawmakers have pressed for involvement, and Democratic Gov. John Baldacci says he will seek their guidance. He plans to present a plan for spending the stimulus so that legislative leaders can review it.

Montana’s constitution requires that the state legislature appropriate all spending. Lawmakers there are trying to determine whether to go through the normal appropriations process or accelerate it in some way.

Gov. M. Jodi Rell of Connecticut, a Republican, created a working group of municipal officials, business leaders, legislators and state agencies to determine the final list of projects.