LANSING – There is no question that federal stimulus funds spent in the state have been effective, the head of Michigan’s recovery office told a Senate subcommittee Wednesday.
Republican members of the Senate Appropriations Stimulus Oversight Subcommittee questioned how effective the first round of monies issued and spent under the federal American Recovery and Reinvestment Act had been, with the state’s estimate that the money had helped to create and retain 19,498 jobs.
Sen. John Pappageorge (R-Troy) particularly questioned the overall effectiveness of the stimulus funding, especially since the definition used is defined by the act. “This bothers me,” he said, urging the state to call on the federal government to change its definition of effectiveness.
But Fritz said, “I don’t have hesitation in saying that this money has been spent effectively.”
And to reporters after the meeting, Fritz said she expected the funding would prove to be more effective as grants going for such things as new battery research and development take effect.
But she also said the federal stimulus plan by itself will not pull the state and the nation out of recession.
Fritz appeared before the subcommittee after the state issued its first report required by the federal act. The state put a summary of the report on its website, but Ms. Fritz said all the reports are to be posted on the federal site, www.recovery.gov, on October 30.
And because every entity that received funding has to issue a report, Fritz said that will result in literally thousands of reports coming from Michigan alone. The state had to issue 432 reports and the University of Michigan alone had to issue more than 400 reports.
Just how the federal agency would cope with the volume of material it has to post will prove interesting.
Committee members quizzed her on how the number 14,498 jobs created or retained was reached, and she said that number is derived using a full-time equivalent number based on the total number of hours worked. That means short-term jobs that no longer exist could be included in the calculation, she said.
The state has so far received more than $2.1 billion in federal stimulus funds, but only about 28 percent was used to help create jobs, or $620 million. Most the rest went to programs such as Medicaid and food assistance, she said.
Asked how the funds could have been more effective, Fritz said all federal funds come with a variety of reporting requirements and officials would have wanted to put the money to work faster.
Once funds used for things like expanded broadband and the advanced battery grants are put into play the state will see a much bigger effect from the stimulus act, she said.
To national GOP criticism that the stimulus funds have failed to lift the nation out of recession, Ms. Fritz said the stimulus will help the nation turn around, but “the national recovery act alone could not stop the recession.”
While “by itself it could not pull us out of recession, it is part of the strategy” in revitalizing the economy, she said.
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