Mini stimulus coming?
The White House has been telegraphing the shape of the proposal that President Obama will make tomorrow in his jobs speech to a joint session of Congress.
It looks like it is a half-sized version of the American Recovery and Reinvestment Act of 2009. The media is reporting that the proposal will be about $300 billion but faces stiff opposition from Republicans in the House. I’d suggest that state and local governments not include these funds in their budgets quite yet. Bloomberg says:
Obama’s jobs plan follows the contours of his $830 billion 2009 economic stimulus package, which also stressed tax cuts, infrastructure spending and assistance to local governments. Still, tax cuts would account for a larger portion of the proposal he will lay out this week.
Much of Obama’s plan may have trouble passing the U.S. House, where leaders of the Republican majority have signaled opposition to new spending that would add to the federal budget deficit. House Speaker John Boehner of Ohio and Majority Leader Eric Cantor of Virginia released a letter to Obama yesterday saying their objections to the 2009 stimulus, which they called a “large, deficit-financed, government spending bill,” have been validated by continued high unemployment.
The direct aid to local governments would focus on halting layoffs of teachers and first responders. Education will be a theme in Obama’s address, and he will also propose as part of his infrastructure program money for school construction. Some of the infrastructure spending would go toward roads, bridges and other surface transportation projects.
There is a great analysis of 2009 ARRA stimulus grants per capita weighed against state budget shortfalls at verisi.com:
In the graph below, I compare the stimulus package across critical states: the large states that will determine the popular vote winner, and the few “swing” states that will determine the winner of the 2012 presidential election. In all of these states (except for NJ), 2009-2011 stimulus grants per capita exceeds the 2012 budget shortfall per capita. While the stimulus may have not been big enough to spur growth, at the state level it has made a material difference in softening the blow of the financial crisis.
Texas is burning
It looks brutal in Texas as they face massive fires. The state is bone dry from a 10 month drought and there is no relief in sight. From the Financial Times:
Wildfires are raging across central Texas, compounding drought that has caused $5.2bn in agricultural losses and led ranchers in the largest cattle-producing US state to rush to slaughter.
At the weekend, the Texas Forest Service responded to 63 new fires, many fanned by winds from tropical storm Lee.
The fires are spread broadly across the state. From PropertyCasualty.com:
A week of brushfires across the state of Texas has claimed more than 1,000 homes, and insurance losses are expected to be in the millions of dollars, according to officials.
Texas Gov. Rick Perry says fires have claimed more than 3.6 million acres since the start of the wildfire season in April.
The governor says that in the past seven days the state’s forest service has responded to 181 fires burning 118,400 acres.
“This one is as mean-looking as I’ve ever seen,” Perry says during a press conference.
Unfortunately Texas has been cutting funding for the volunteer fire departments which make up much of their front line defenses in local communities. From KVUE.com in March:
State funding for volunteer fire departments is taking a big hit. It is going from $30 million to $7 million. Those departments are already facing financial strains.
The State Firemen’s and Fire Marshals’ Association of Texas represents 21,000 state firefighters. The Association says more than 80 percent of volunteer firefighters are reporting taking a personal hit in the budget crisis. They have started using their own money to help pay for equipment and supplies.
Maybe Governor Perry could rustle up some emergency funds to support the volunteer firefighters. Seems like it would be a good investment for the state.
Municipal bond happenings
Daniel Berger of Thomson Reuters Municpal Market Data is the chairman of the Municipal Analysts Group of New York and they are hosting a cocktail party tomorrow night for muniland geeks.
On September 22nd they will host a luncheon at the Union League Club on “Restoring Trust in the Municipal Bond Market” with Detroit Mayor David Bing. Details here.
+ Good links +
Brookings: Job gaps by state
Rockefeller Institute: Strong, Broad Growth in State Tax Revenues Continued in the Second Quarter of 2011
Emergency Management: 10 Years After 9/11: How Far Did $635B Spent on Homeland Security Go?