Economic stimulus outcome not dramatic but measurable
New Mexico’s economic stimulus money will begin to peter out in July. From the numbers, the American Recovery and Reinvestment Act didn’t live up to our biggest expectations, which were very big, but it defied predictions by pessimists.
In a nutshell, stimulus funding didn’t jump-start our economy, but it kept the bottom from falling out and bought us some time. If you were one of the people who got or kept a job supported by stimulus money, and you’re now about to be unemployed, it’s at least a better time to be job hunting than it was in the depths of the downturn.
Initially, there were worries that New Mexico wouldn’t get its share, but, as usual, we were one of the bigger hogs at the trough. We got $1,826 per person, compared with a national average of $1,400, according to Pro Publica.org (“journalism in the public interest”).
There were also concerns that small towns and rural areas would find it hard to compete for funding because the program was designed for speed. Much of the money arrived at once, deadlines were short, and the push was to get money out there. “Shovel-ready” was the mandate. For cities with engineers and planners on staff, it wasn’t hard to pull some projects off the shelf, but smaller communities have to contract for planning and engineering; as Española’s mayor pointed out, the application process had no provision to start projects. Former Gov. Toney Anaya, appointed stimulus czar, tried to improve the odds by calling in a team of 48 business leaders, university administrators and state and municipal elected officials to help smaller communities and rural areas compete. And state agencies, like the Department of Transportation, came up with projects around the state, which also helped.
So the distribution was more equitable than it might have been, but the map on the state Office of Recovery and Reinvestment Web site (http://www.recovery.state.nm.us/) reveals winners and losers. Thinly populated and/or poor counties like Catron, Mora, De Baca, and Sierra counties, at a million dollars or so, didn’t fare well; Grant, Socorro, Chavez and Colfax counties, at $4 million to $7 million did better, as did Cibola and Lea counties ($18 million each). San Juan ($64 million), McKinley ($48 million), Rio Arriba ($36.3 million), and Lincoln ($28 million) counties did very well.
The winner of the stimulus sweepstakes, hands down, is Los Alamos County at $251 million, which approached Bernalillo County’s $257 million, to be expected for the state’s most populous county. You might find a few questionable expenditures, but for the most part they covered transportation projects, infrastructure and, in the case of Los Alamos and Cibola counties, environmental cleanup. So a good many counties have better roads, new water lines or upgraded wastewater plants they might not have gotten otherwise.
As for jobs, it could have been worse. At the end of 2009, the year stimulus monies began arriving, unemployment was 8.3 percent. A year later, it was 8.5 percent but by March eased a bit to 8.1 percent.
UNM’s Bureau of Business Research measured the impact and concluded that job losses “would have been far greater and the pain much worse” without action by the Federal Reserve and its international counterparts and without the kind of major stimulus that the American Recovery and Reinvestment Act provided. From the $5.7 billion allocated to New Mexico, BBER estimates 24,000 jobs created or preserved through June 30, 2010, and 23,000 jobs between then and June 30.
Whether it was enough or whether it was the right approach, I can’t say, but as the state’s economy shows a pulse once again, it appears the program did what it was supposed to do. No more, no less.
© New Mexico News Services 2011