Herald Journal - Enterprise Dispatch - Delano Herald Journal
Local businesses, cities wait for answers regarding stimulus

Feb. 23, 2009

After a Wright County Economic Development meeting Wednesday, details are still unclear about who will benefit directly
Staff Writer

Just days after President Barack Obama signed the nearly $800 billion American Recovery and Reinvestment Act (ARRA) of 2009, Wright County Economic Development Partnership hosted an event on what Minnesota should expect to receive.

Tom Hanson, commissioner for the Minnesota Department of Management and Budget, is coordinating the state’s stimulus package and spoke about the stimulus plans at the Delano City Hall Thursday morning.

Individuals in attendance such as Kelly Hinnekamp, city administrator for Howard Lake, and Brian Streich of Palo, a heating, cooling, and plumbing company based in Cokato, who are wondering if they will see any of the benefits from the package.

Chris Schultz of Herald Journal Publishing who also attended said he expects much of the money will be used to replace the budget deficit so the state won’t have to cut as much as it anticipated.

Streich learned that the state isn’t going to get as big of the pot as he thought it would.

His interest lies in mostly the green energy tax credit on solar, wind, and geothermal systems for home owners.

Hanson was still unclear of the details surrounding the tax credits, which were separate from the report given, and advised Streich to contact the IRS for more specifics.

“It’s too early in the game to get specifics,” Streich said.

“It sounds like they’re still sifting through the package,” he added.

Hinnenkamp was expecting the package to include more housing and development dollars and it appears there will be more money going toward social programs, she said.

As administrator, she waited to hear what rehab grants there are going to be for energy assistance for home owners and city infrastructure, as well as an update on the USDA Rural Development grant.

She was happy to see the $35 million for drinking water and $73 million for clean water projects.

“It’s a learning process and we’ll take advantage [of the benefits] when we can,” she said.

Ultimately, the money will be appropriated by the legislature, Hanson said.

Hanson distributed a preliminary breakdown of the allocations from the Federal Funds Information from States based out of Washington DC.

Hanson explained to the group, the state is expecting to see $4.3 billion of the package, but exactly how the money will be allocated and the exact dollar amounts have been changing every day.This number does not include tax credits.

The information in the chart does not include estimates of what Minnesota expects to receive through the competitive grant process, Hanson noted.

Details of the package

The money from the economic stimulus Hanson said, is “like drinking out of a fire hose,” referring to the large amount of money and how fast it’s coming into the state.

For example, the $561 million for highways and bridges will be dispersed through the department of transportation.

One of the requirements to receiving this money is that jobs must be “shovel ready,” Hanson said, meaning the land must be purchased and the rights-of-way set.

This is because cities will have a 120-day window to determine which projects will be funded, Hanson explained.

The stimulus does look a little different after coming out of the Senate than it did coming out of the House of Representatives.

Some areas were pulled out in order to bring the cost down, Hanson explained.

Money for school construction for both k-12 and higher education were cut and won’t receive any stimulus money as once proposed.

Schools can expect to still see an estimated $121 million for Title I, which includes $94 million for grants to school districts and $27 million for school improvement.

Schools can also expect to see some money for special education, for a total of $204 million.

Minnesota will also receive $667 million that will go to the Minnesota Department of Education and Office of Higher Education to be administered, $149 million for general purpose in the state’s general fund, and roughly $2 billion for Medicaid which saw the biggest impact.

Hanson explained that nothing has been finalized and there are still a lot of details to be sorted out. He did say March 3 will be the next state budget forecast and at that time, we should know more on how this stimulus package will affect the nearly $5 billion state deficit.

To learn more about the stimulus and tax credit portion, check out www.irs.gov.


 

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