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SPECIAL Economic Recovery Update, 2/10/09
Bill status. The full Senate today approved its recovery bill by a vote of 61 to 37. Estimated to cost $838 billion over 10 years, the Senate bill garnered three GOP votes following the compromise that was crafted on Friday. That deal included reductions totaling $80 billion, a significant portion of which would have gone to local government via the states for school construction. The compromise also includes increased tax incentives for home and car buyers. Click here for an excellent side-by-side comparison of the two bills. We will now keep a close eye on the conference committee to monitor whether infrastructure provisions will change. Click here for a list of conferees and their staff contacts. If anything significant emerges quickly, we may send another update to you tomorrow or later this week.
Project reporting and evaluation. We are considering how CMAP can help funding recipients to meet federal requirements for reporting on the impacts of their projects. Yesterday, CMAP participated in a NARC conference call with officials from the Federal Highways Administration, who explained that they are still considering requirements for implementing agencies to report on how recovery funds were spent. It is clear that, in addition to reporting on project progress, recipients will be required to report on their projects' economic impact. FHWA's current guidance about reporting is contained in items 46 and 47 in their Q&A on Economic Recovery Issues:
"We suggest that attention is given to tracking the use of funds on projects from start to finish, e.g. types of projects (with some detail regarding the description or scope of work), when various project activities (like advertising, award, notice to proceed, etc.) begin and/or end, how many people are employed during the various of phases where these funds are used, etc. For this administrative effort, details are suggested versus streamlining. There will probably be requests for many different cuts of information regarding use of the economic recovery funds and benefits to the economy. In addition, the Division offices and States should include the locally-administered projects in tracking the projects that use the economic recovery funds." (Bold added by CMAP.)
This issue will apply not only to transportation projects, but all projects funded through the stimulus program. CMAP has talked to many of our partners about how tracking and evaluation could be accomplished and have been evaluating different methodologies for tracking and determining economic impacts of proposed projects. Congress and the Administration have stressed that this is not a business as usual infrastructure bill, but one that is designed to create immediate and lasting jobs.
We recognize that, due to the "use it or lose it" provisions, there will likely not be time to do a rigorous evaluation of projects that are in the pipeline for construction to start right away. But at minimum, the immediate job-creation impacts of those very short-term projects could be considered and reported upon. And for projects that will take longer, the criteria can be considered more thoroughly.
To that end, CMAP has issued an RFP for software to measure the economic impacts of stimulus projects undertaken in the region. That software should be available to project sponsors to help with assessment of projects whose construction would begin later in 2009 or 2010. In addition to evaluation and reporting, our staff efforts are seeking to add value in the following areas:
- We seek to provide eligible organizations (including municipalities) in our region with the latest information about funding opportunities. Based on both the House and Senate bills, we anticipate that significant funding will be distributed through national-level or state-level competitive or formula grants. These projects will include affordable housing rehabilitation, brownfield remediation, energy retrofits of public buildings and homes, and many others. We welcome the support of our partners in cataloging grant opportunities and helping us communicate them to eligible organizations.
- We continue to discuss with IDOT the need for northeastern Illinois to receive an appropriate level of transportation funding. It is likely that similar discussions will be necessary with IEPA, IHDA, DCEO, and other state agencies that will be responsible for allocating funds.
Issue area status reports. At our new web page about the recovery package, CMAP staff have been posting materials about how the pending legislation affects infrastructure issue areas. For more details, see that page or click on links in the following short summaries.
- Housing. The Senate compromise includes major housing-related cuts, including the Neighborhood Stabilization Program (NSP) and Section 8 housing retrofits.
- Water. The Senate made a significant change that could affect water and wastewater in our region. The Natural Resource Conservation Service's Watershed Rehabilitation Program, which is meant to rehabilitate structural flood control measures, has been cut to $65 million, roughly half of the House amount.
- Energy. Regarding energy, the Senate bill reduces State Energy Program (SEP) funding to $500 million, compared to $3.4 billion in the House, among other cuts.
- Transportation. Illinois would receive about $1 billion in road and bridge funding from the recovery act. Total national funding for roads and bridges in the Senate compromise bill is $27 billion, and the comparable House total is $30 billion. We are continuing discussions with IDOT and our downstate partners regarding how the funding will be distributed. The most significant difference is the Senate's inclusion of $5.5 billion for supplemental discretionary grants, which may be used for projects that will have a significant impact on the nation, a metropolitan area, or a region. While we are concerned about how these projects will be evaluated and selected, this appears to be an opportunity for us to fund CREATE projects as well as other major projects that have true national significance. Transit dollars in the Senate bill are $8.4 billion, compared to $12 billion in the House.
- Economic Development. To qualify for funding through either the Public Works grants or the Economic Adjustment Assistance grants, the applicant must have a complete Comprehensive Economic Development Strategy (CEDS) for the region. This raises doubts as to whether any communities in northeastern Illinois will be able to qualify.
- Workforce Development. According to the proposed House and Senate bills, most workforce development funding will be allocated according to existing Workforce Investment Act (WIA) legislation, which the Department of Commerce and Economic Opportunity (DCEO) administers for Illinois.
- Telecommunications. During the Senate's weekend negotiations and through the Nelson-Collins amendment, funding for the broadband technology opportunities program was reduced by $2 billion.
- Brownfields. There is little to no difference between the House and Senate bills' brownfields funding, which is $100 million.
News links. Among the related media coverage:
- See late-breaking coverage of the Senate bill's passage in the New York Times and Washington Post.
- CNN, CSPAN, the New York Times, and Associated Press have also published summaries comparing the House and Senate bills.
- The Washington Post has a story with some details of how allocation and oversight might work.
- WBEZ had an NPR story about the challenges of defining and implementing "shovel ready" projects. Also on NPR's web is a feature about the Senate bill.
- The New York Times ran an editorial advocating that affordable housing assistance should be included in the recovery package.
- The Business Ledger has a story about the stimulus package, quoting CMAP Board chairman Gerald Bennett, executive director Randy Blankenhorn, DuPage County Board chairman Robert Schillerstrom, and Will County Board chairman Jim Moustis.