Pa. quickly budgeting stimulus funds

It's a big job to give away billions of dollars in a hurry.

But two months after passage of the federal stimulus package, Pennsylvania is well into the task of allotting the $9.4 billion that will be under state and local control.

The Department of Transportation, which expects to get $1.026 billion for road and bridge repairs, so far has awarded contracts for $73 million in construction - work that it says will create or save 2,195 jobs.

On Monday, the state-run authority that helps finance sewage- and water-treatment plants allotted the first $119 million of the $220 million it expects to get in stimulus aid.

This weekend came a federally imposed deadline for the state to submit a draft plan on how it intends to manage $358 million in stimulus funding for energy-saving weatherization upgrades in the homes of 40,000 to 50,000 low-income residents.

Gov. Rendell has said stimulus money must be spent "as wisely, as effectively, and as quickly as possible."

The question is: Can those goals be reached together? Can the spending be both careful and quick?

Republicans have called for greater legislative input into decisions, and state Auditor General Jack Wagner, a Democrat, has written a letter to the U.S. Government Accountability Office questioning whether the state has effective management control, even now, over some longtime federal-state programs.

But James P. Creedon, installed by Rendell as "implementation officer" for the stimulus program, said the stimulus money would be spent scrupulously.

"It's a huge amount of money for the people of Pennsylvania," he said last week.

One big reason the money will be spent efficiently, Creedon said, is that the state is not setting up new programs to manage it. The money will pass through existing channels for federal aid to the state.

"In a lot of ways, the federal government did us a favor" by appropriating funding within existing categories, he said.

For instance, the federal government already helps the state with job training for unemployed workers and youths seeking summer work. The bureaucracy to run the program exists. The stimulus will add $74 million to that pool of available aid.

The federal money mostly comes with clear guidelines on how, when, and where it should be used - with the exception of $99 million for innovative energy projects, Creedon said.

Nearly half of the money - about $4 billion - will reimburse the state for money it spends on the federal Medicaid insurance program for low-income people. This money will help plug the state's budget gap.

An additional $2.56 billion won't be held by the state but will be passed on to school districts, mainly to be used in programs for the disadvantaged.

Creedon said that, judging from the fund requests received by the Governor's Office, many in the public think that stimulus money is widely up for grabs.

"We get letters saying, 'I'd like $3 million for my museum,' or 'I'd like $500,000' for this or that," he said. "But that's not how it works. This is all category-driven money."

Management of the stimulus is being invented as it goes along.

The program is essentially run by Rendell's inner circle of aides, including Creedon, secretary of the Department of General Services, and Donna Cooper, secretary of the Governor's Office of Policy and Planning.

The state is managing the stimulus program without setting up an agency or even making a lot of hires.

The staff at the Department of Environmental Protection will be assigned to handle the energy money, and the staff at the Pennsylvania Infrastructure Investment Authority will manage the clean-water money.

Even PennDot, which has spent the most money so far, hasn't had to hire any employees, officials said. The $926 million in contracts that PennDot plans to have sought bids for within the next 30 days are being overseen by two senior engineers working out of a seventh-floor "war room" in the Keystone Office Building across a side street from the Capitol. Some workers in district offices have been on 12-hour shifts.

The only new government creation is the Stimulus Oversight Commission, set up by Rendell to provide "transparency" and "accountability" in the spending of the stimulus money. The governor named Ronald J. Naples, a former corporate executive from Wynnewood, as chief accountability officer.

Naples said the commission so far had a paid staff of three, including himself, and a small suite in the Capitol, four floors above Rendell's office. Rendell has given it a budget of about $500,000.

Naples said he did not really see himself as a watchdog. He said his job would be to keep the stimulus program headed toward its goals, including job creation and investment in long-term improvements to the state's infrastructure.

"I don't see there is a need to be confrontational in any way," he said. "You are never going to do the accountability if all you do is . . . look over everybody's shoulder. It's got to be a team effort."

The commission includes Republican and Democratic members from both houses of the legislature, as well as a representative of labor and a representative of business.

Rep. Brian Ellis (R., Butler) complained that, at its first full meeting on Thursday, the commission was told of decisions only after the governor's staff had made them.

"Basically, we're just going in there and getting a report on how they spent the money," Ellis said. "We haven't had any input. We need oversight, not hindsight."