Blog: Dermot Cole
Alaska and the stimulus law
Published Wednesday, March 25, 2009
Here is the latest analysis of the federal stimulus law prepared by Larry Persily, an aide to the House Finanace Committee.
What happens to the dollars if Alaska, or any other state, declines to accept its share of federal stimulus funding?
For many of the formula programs, funds unclaimed by states will be shared among those states that participate in the program. The following are some examples but not a comprehensive list. I looked at some of the larger pots of money, rather than researching the details of every small appropriation.
Transportation dollars: Any transportation money not claimed by a state will be put into a pot and shared among participating states with projects that meet the federal requirements and are ready to go.
Fiscal Stabilization Funds: This is the money allocated to education (81.8%, or $93 million in Alaska) and education or anything else the state wants (18.2%, or $20.7 million in Alaska). The stimulus bill includes a use-it-or-lose-it provision for these funds. The Secretary of Education will reallocate any unclaimed dollars to the other states.
Special education funds: Any unclaimed money will be reallocated to the other states.
Unemployment modernization funds: This is the $15.6 million Alaska could receive if it is willing to amend its eligibility base period for unemployment benefits. The stimulus bill says any money unclaimed by states “… shall upon the close of fiscal year 2011 become unrestricted as to use as part of the federal unemployment account.”
Labor training funds: The laws the Secretary of Labor is to establish procedures for distribution of any additional funds.
The answer is easier for programs that distribute money exclusively through grants. If Alaska decides not to participate, it simply means one less state competing for the grants. There would be no formula money to reallocate to other states.
As for a strict formula-based program such as Medicaid, each state’s allocation is a fixed percentage of its expenses, and a decision by any state(s) not to accept money would not boost the other states’ federal reimbursement rate.
The unclaimed money would stay in the U.S. Treasury, though I wouldn’t discount the will and the determination of the Medicaid office (and Congress) to find other uses for the funds.
Does the stimulus law demand that states adopt energy-efficiency codes for residential and commercial buildings as a requirement to receive home weatherization funds?
No.
Though the governor’s Office of Management and Budget, as of Tuesday, was still waiting for a letter from the Department of Energy confirming this fact, the Department of Energy Web site provides confirmation that state energy codes are not required for weatherization funding ($18.5 million for Alaska).
The Web site confirms, as expected, that states must adopt energy standards in order to qualify for State Energy Program Formula Grants under the stimulus bill ($28.2 million for Alaska).
The department’s formal application for State Energy Program Formula Funds specifically references the code requirement of the stimulus bill. There is no such reference or certification requirement or even a mention of energy codes anywhere in the 43-page application for weatherization funds.
If the state changes its eligibility base period in order to qualify for $15.6 million in unemployment and job centers funding (called Unemployment Modernization Funds), can the state later revert back to its stricter eligibility standards?
Yes, there is no prohibition in the bill against states going back to the previous base period for determining eligibility for unemployment benefits after receiving the federal stimulus money.
The only prohibition is that states cannot write a sunset date into the law expanding the base period.
Also, states do not need to have any statutory changes in place in order to receive the stimulus money. The law only requires that states adopt the expanded eligibility base period within one year.
In order to receive the $15.6 million, Alaska must change its statute to expand the base period for determining unemployment eligibility.
The intent of this provision in the stimulus bill is to assist more of the millions of unemployed Americans, while distributing additional funds to the states to upgrade, improve or otherwise modernize their unemployment and jobs service programs.
The Alaska unemployment trust fund is supported by employee and employer contributions; no state general fund money is involved. If more people receive benefits, the fund would need additional contributions to keep pace.
The Alaska Department of Labor estimates that the eligibility change put forth in the stimulus bill would cost Alaska employers an average of $10 per year per worker in contributions to the trust fund.
The employer contribution rate is expected to go down in Fiscal Year 2010 (due to legislative changes last year). If the legislature adopts the provision of the stimulus bill, it would mean the employer contribution rate would still go down next year, just $10 less per worker (on average).
Just an FYI: South Dakota and Iowa were the first states to change their laws to take advantage of the stimulus money under this program.
Meanwhile, the governors of Mississippi, South Carolina and Delaware have come out against accepting the money. And House Republican leaders in Virginia, along with that state’s chamber of commerce, are calling for Virginia to reject the funding, which could total $125 million for that state. The opponents say the changes are bad for business.
Supporters of the unemployment provision, however, point out that Virginia is near the bottom of the nation in benefits paid to jobless residents — the average unemployment benefit in Virginia is $98 a week, whereas the national average is $258 — and any money to help improve the system would be welcome.
One last note on the Unemployment Modernization Funds: The Secretary of Labor has until April 18 to issue new rules for the program.
Among the general provisions of the stimulus bill are the following statements that are pertinent to some of the concerns raised at Tuesday’s House Finance meeting:
The funding is temporary, intended to preserve and create jobs, and make investments in infrastructure, energy and science, unemployment assistance, and state and local stabilization.
Additional funds are dedicated to improved oversight, including money for the U.S. Inspector General and Government Accountability Office.
•PORTFOLIO ARTICLE: The National Review has a critique by Jim Geraghty of Joe McGinniss' article about Gov. Sarah Palin and the gas pipeline:
Joe McGinniss’s cover story in Conde Nast’s Portfolio on Gov. Sarah Palin is almost too well-researched to be dismissed as a hit piece.
Over six pages, McGinniss, who covered Alaska’s oil boom in 1975, takes us deep into the world of the state’s oil-and-gas industry, the challenging terrain, the murky politics, and the Byzantine relationship between politics and big business.
A reader who comes to the topic with no familiarity with the issue comes away more knowledgeable, and for that McGinniss deserves credit.
But the article’s argument doesn’t always mesh with the details. To many readers of Conde Nast’s other publications — The New Yorker, Vanity Fair, GQ — the Republican star Palin is, ipso facto, a villainess.
Had Portfolio run a story that reads, “Palin’s gas-pipeline plan has an element of risk but could work,” some readers no doubt would have complained that a previously respectable business magazine had suddenly scrapped its credibility by serving up a puff piece about the Cruella de Vil of the liberal imagination. (The cover photo has Palin in the snow in a fur-collared jacket.)
Instead, the Portfolio piece follows a simple tune: Whatever decisions Governor Palin makes about this massive, complicated project, she is always wrong.
Palin is accused simultaneously of empowering the oil companies and of being needlessly antagonistic to them; she’s the lone impediment to the project but foolishly overlooking numerous unresolved obstacles; she’s accused of making a risky bet on the future value of natural gas and simultaneously blamed for not acting quickly enough in light of the world’s rapidly expanding energy demands."
For the full story, go to http://article.nationalreview.com/print/?q=MmMyYjZjODhmMWU1NzgzMmUyMDU4NmM5MTAxZDQ4NTk=
Wow and "Aid" knows more that several other states and their Governors.Larry Persily should go on MSNBC and explain this to the nation.In fact I think Obama could use him to refute the Republicans who disagree.Give it a break Dermot.....
Did a quick search on Larry Persily. Looks like he's not just a great citizen looking out for our best interest, he's a newspaperman, like dermot, who hates Palin. Seems he was Palin's Associate Director for Oil, Gas, and Renewable Energy; Commerce; and Transportation in 2007. Did he get fired? Another great article. Thanks.
Look at this link, he's a paid consultant for the State of AK. This stinks to high heaven.
http://lba.legis.state.ak.us/contracts/l...
From http://gov.state.ak.us/archive.php?id=30...
"Persily has an extensive background in public service and with the press. Among other positions, from June of 1999 to June of 2003, Persily served Alaska as Deputy Commissioner for the Department of Revenue. He has held numerous positions in the press, including with The Associated Press, Juneau Empire, Anchorage Daily News, and The Anchorage Times."
Dermot needs to change his last name to Olberman.
st, don't you mean "Why would I trust one loser paid consultant over another loser, egomaniacal, self-promoting, elected conservative?"
Honestly, though, I do agree with Palin on this issue. So what if the other states will get the money we reject? That does not mean that we should concede our fiscal values.
1.) The federal economic stimulus money is going to be spent, and,
2.) ALL Americans are going to have to pay for it whether we get the benefit or NOT.
Now for the people that do not understand these simple facts, perhaps ARRA education funding would be a waste of time anyway.
The only strings attached to the economic stimulus money is the infamous "YO-YO string" that some politicians want to play with at the moment.
out in the cold.....All Americans are not going to pay for our "future" state budgets.Alaskans are it's time to pull your head out.Do you want California taxes in Alaska? Dermot we get it you don't like Gov.Palin, maybe the news miner should look at what your really trying to do here,and Dermot if you ever lose your job and the paper goes under there's a place for you working for Holis French.
Dermot, thanks for breaking down facts and doing some actual investigation for your op-eds. It is refreshing to read journalism as it was intended. Unfortunately, print journalism is a dying art. You may have to re-invent yourself as a Twitter sensation in a few years.
I am constantly amazed at the lack of reasonable arguments on the News-Miner forums. One must wonder whether the opinions expressed are an accurate representation of Alaskans. I think that they are decidedly skewed toward the extreme right of the spectrum; however, they do give an idea as to the wackiness that is Alaskan culture. Folks need to stop automatically disagreeing with opinions that aren't their own. If you don't have a counter argument or a possible solution to a problem, you should sit down and think one out before posting. It would make reading the forums much more interesting and possible solutions might evolve.
For instance. The motivations of McGinniss, The National Review and Gov. Palin should all be taken into account. Which of these is not like the other? Obviously the National Review, who was attempting to defend a conservative politician. Fancy that. A conservative paper defending Gov. Palin and trying to lambast Mr. McGinniss. Regardless of how you feel about any of these parties involved you should be skeptical of the National Review butting into Alaskan politics.
So instead of three sides to the issue we're left with two. They are both trying to achieve the same end and until Gov. Palin is willing enter into a legitimate debate with her citizens then nothing is going to happen. People have a right to be doubtful of her plan. How is she going to get gas into the pipeline? Public servants shouldn't depend on citizens' trust, they should earn it.
st....it is a column and Dermot is a columnist...like William F Buckley or Jack Anderson. They are paid for their columns which represent their views. Conservatives have columnists, liberals do too. You are welcome to put together your writing portfolio and a resume and see if there is a newspaper that will give you your own column as well where you will be free to put your opinions in print as well. Dermot is paid for HIS opinion. If you don't want it, don't read it. Find a paper that has a columnist you enjoy and read that one. Maybe Dermot should write a column on why we can't just respect each other.
Dermot, keep on keepin' on.
st - Now that lovewinter has explained to you what an op-ed piece is, you may yearn for a more conservative view. Go ahead and read the DNM's very own daily editorial, a collaborative effort headed by Rod Boyce, or Rod's own blog on this website. Just a few clicks away. The DNM does a great job of balancing Cole and Boyce to give a variety of opinion. I strangely find myself agreeing with both of them on many issues.
What happens to the drugs (Money) if Alaska, or any other state, declines to accept its share of federal stimulus drugs (money)?
Post a comment