Apples and Oranges - "Stimulus" Fact and Fiction‏

We've all read or heard the media stories about the federal "economic stimulus" package that Congress passed at President Obama's urging last month. Love it or hate it, dollars from Washington are coming to states and local communities across America in an effort to jump start the failing economy. One of the big elements of the stimulus legislation is "State Fiscal Stabilization" -- $144 billion that is divided up among each of the 50 state governments to help shore up their operating budgets, mostly to pay for teacher salaries and health care for low-income families or people with disabilities. In Arizona, Governor Brewer has indicated that she's willing to accept stimulus dollars to help deal with the massive deficit we are facing in both the current budget and next year's budget.

In Phoenix, we have been dealing with slowing revenues for many months, and in February approved about $200 million in budget cuts to maintain a balanced budget this year and next as the law requires. These cuts impacted hundreds of City jobs and will reduce services we provide in the community. Because of all of the media attention on the federal stimulus package and our aggressive efforts to bring some of those dollars to projects in our city, you might think that our budget problems will be solved with stimulus money much like the state's budget problem is partly solved with those dollars. If only that were true!

Unlike for state governments, the federal stimulus law provides NO DIRECT FUNDING to cities for ongoing services or operating costs. The vast majority of funding that cities like Phoenix will receive is for capital projects -- much like the Works Progress Administration (WPA) paid for public works all over America during the Great Depression. Stimulus dollars will not, with very minor exception, help with the Phoenix budget shortfall. Unlike the states, we have to solve that problem on our own.

Remember to SHOP PHOENIX and tell your legislators to protect city revenues!

Source: P.L.A.N.