[Happy New Year!
Today we are highlighting the green building legal story from 2009 that will have the most impact on the industry in 2010. At the beginning of 2009, Congress and the Obama Administration spent months crafting the American Recovery and Reinvestment Act, which eventually included over $25 billion for green projects. Less attention was paid to how these ARRA funds would be administered. The story below suggested that states and cities may have trouble administering ARRA green funds.]
On February 17, CNN ran the above headline after President Obama signed the stimulus bill. To me, a more perfect headline could not have been written.
Ever since I read about the stimulus bill, one particular nuance has interested me: the package does not include earmarks. Due to the lack of earmarks, the hardest part of the stimulus bill may be administering the $787 billion in funds.
The lack of earmarks has important implications for state and federal energy programs throughout the country. Without earmarks, state energy offices will have wide-ranging discretion in doling out large sums of money not previously seen:
The biggest test of the administration’s energy goals may come in spending the billions that have been devoted to states and cities for improving energy efficiency. To get the money out quickly, the plans sends it through a range of programs that are not accustomed to seeing funding on this scale. State energy offices that annually receive less than $100 million combined from Washington are slated to receive $3.4 billion.
A recent NPR story, "Earmark-Free Stimulus Bill Lacks Spending Direction", focused on the potential problems that may arise when the money is sent to the states:
When this bill passes, a Niagara Falls of money will flow out of Washington and into the accounts of state highway commissioners, governors and legislatures, local school boards, county executives — even mayors, [the Brookings Institution’s Sarah] Binder says.
"It raises a whole host of questions about how efficiently money can be spent, how effectively it will be spent, how quickly money can be spent, just because there’s no set process here for determining how money will get out the door to create jobs or, as the president said, to save jobs," she says.
In one particular instance, a South Carolina official who runs the state’s energy efficiency programs, will be tasked with managing large sums of money and finding proper projects and programs for the money:
In South Carolina, the state energy office is so small that its director, John Clark, answers the phone. He said his office, which receives $.15 million per year, has put out an urgent call to state offices and school districts for energy-saving projects to receive. He will also have to advise the state’s cities and counties, which have even less experience in big energy efficiency projects and are slated to get $35 million of their own from a separate $3.5 billion block-grant program in the package.”
While Republicans, Democrats and the President argued over the stimulus package for weeks, the real battle may arise when state agencies and officials attempt to divide up the stimulus funding and choose the projects that receive funding. How are you planning to seize the opportunities that arise from the stimulus?