Our View: Stimulus a gap filler, not a crutch

It’s been four months since the American Recovery and Reinvestment Act, aka the stimulus bill, became law amidst both acclaim and criticism. The mega-billions spending package was rushed into existence to shore up a U.S. economy that, at the time, was weakening rapidly.

Since then, we’ve seen signs that the dark pit of this recession might finally be seeing light from a future recovery. And we all hope that recovery’s not too far out in time.

The stimulus plan prescribes $787 billion in spending as medicine for our ailing economy, with more than $6 billion of that targeted to Georgia. The road to the stimulus was marked by partisan debate about whether the spending was necessary, or even prudent. That was a necessary discussion at the national level.

In state capitals, the issue is more about basic economics, pitting budget must-dos against declining revenues. That mismatch remains with us, given that Georgia state agencies were told last week to whittle another 3 percent from budgets as tax revenues continue to fall.

It’s best then to think of the stimulus for now as a safety net for state finances. Even so, at this early juncture, it’s fair to ask what’s been accomplished so far. In other words, is the stimulus stimulating? And have Georgia and the Atlanta region benefited?

The billions flowing out of Washington have undoubtedly helped shore up state and local government budgets. That work is akin to contractors repairing the trusses and beams in a badly weakened house. Until structural integrity’s restored, there’s no point in trying to further rebuild the dwelling for future use.

In Georgia’s case, the influx of stimulus money means that the state thus far has faced choices that were quite tough and certainly painful — but not yet devastating. Staved off, at least for now, are the truly deep, slashing cuts that would have hammered hard our citizens, businesses, schools and our prospects for the future.

The Beltway folks who’ve been gathering up and doling out taxpayers’ money can legitimately claim some, but certainly not all, of the credit for postponing the fiscal day of reckoning here and in other states.

Credit’s also due to Georgia for being a generally well-managed state. Fiscal prudence pays off in times like these. Our relatively low per-capita spending meant we had to cut proportionately less to achieve the balanced budget called for by Georgia’s constitution. The state’s disciplined replenishing of its rainy day fund is also paying dividends — directly into depleted state coffers.

All of that is not to minimize the dire situation Georgia faced in crafting a balanced budget for the fiscal year that begins next Wednesday. According to the Georgia Budget and Policy Institute, the fiscal 2010 state budget uses stimulus money to close 44 percent — or $1.39 billion — of a $3.1 billion total deficit. The rest of the fiscal hole was sewn shut using a combination of budget cuts, reserves and other actions.

Although it’s still pretty early in the stimulus trickle-down process, metro Atlanta is seeing some benefits. For example, the Atlanta Regional Commission is seeking applications from county governments for transportation projects that would use a $27.1 million slice of ARRA money.

Georgia this week will also hold a groundbreaking on the first GDOT highway project to use stimulus money — improvements on a stretch of U.S. 19 in south Fulton and Clayton counties. Stimulus money also has been proposed for projects as small as $40,000 worth of “ruggedized” laptops for field use by crime scene investigators in Conyers.

Metro areas such as Atlanta face both challenge and opportunity stemming from the ARRA. The Metropolitan Policy Program at the Brookings Institution notes that “the need for fast action created a bias towards ‘business-as-usual’ delivery systems” for stimulus money, meaning a federal-state-local cascade in many cases. That raises the risk of the old urban versus rural divide. Worse, a conventional funding path can inhibit innovative, bold thinking that’s needed to make strategic bets on the future. That’s no small matter, given that ARRA calls for spending hundreds of billions on just those types of investments.

That’s where groups such as the ARC can play a strong role in helping galvanize regional thinking toward projects that will give us the greatest return on investment.

Brookings says that U.S. cities generate three-fourths of the value of goods and services produced in this country. That means metro areas will be a deciding factor in how well the stimulus money’s spent for the common good.

Because our grandchildren may well end up paying a good part of the bill, it’s incumbent on us all to be wise stewards of the money we’ve diverted from their future.

— Andre Jackson, for the Editorial Board

In coming weeks and months, we will look at major issues Atlanta must address in order to move forward as the economy recovers. Look for the designation “Atlanta Forward,” which will identify these discussions. Send comments

to atlantaforward@ajc.com.