Over the past 18 months, Southwest Florida has received more than $671 million in federal stimulus funding through the American Recovery and Reinvestment Act (ARRA) of 2009. In the short term, those funds have done some good things for Sarasota and Manatee, like paying teachers’ salaries, building a runway at Sarasota-Bradenton International Airport and providing training services for the unemployed.

“Without the stimulus funding, the effect on Florida would have been devastating,” says Don Winstead, special advisor to the governor and the state’s “stimulus czar.”

But there’s little question that the Gulf Coast region has gotten less than an average share of those federal dollars. The five-county region (Manatee, Sarasota, Charlotte, Lee and Collier counties) has a population of 1.82 million, roughly 10 percent of the state’s 18.3 million. But the region only received about 6 percent of Florida’s $11 billion in stimulus funds.

While there are reasons for that disparity—primarily demographics as well as the national strategies driving the programs—the result is clear: The stimulus funds have had little impact in lowering the region’s high unemployment rate.

“In many ways, the stimulus funding has not lived up to its billing in terms of creating jobs and jump-starting the economy,” says economist Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida in Orlando. “One reason is the sluggishness with which the money gets into the economy. Passing legislation authorizing spending is just the start of a long process. There are still hundreds of billions of dollars in the pipeline that have not yet made it into the economy.”

A closer look at the stimulus

To understand why the region and state have not benefited more from the federal stimulus funding, it’s necessary to take a step back in time. After the 2008 meltdown in the nation’s financial markets, the new Obama administration and Congress began moving quickly to stabilize the economy, boost consumer spending and restore business confidence.

Some of the resulting stimulus programs, like the $8,000 income tax credit for first-time homebuyers and the “cash for clunkers” automotive trade-in programs—although controversial—achieved their goals. Sales of homes and vehicles rose as consumers took advantage of financial incentives that put dollars in their wallets.

Other federal programs, including the Small Business Assistance bill passed in late September 2010, were designed to provide credit to businesses so they can grow and hire more workers. However, many businesses have been reluctant to invest in expansion programs until they see the recession is clearly over.

But the centerpiece of the stimulus program was the ARRA, which became law on Feb. 13, 2009. A package of very different programs, the ARRA dedicated $787 billion to five stated purposes:

• Preserve and create jobs (economic stimulus)

• Assist those most impacted by the recession (more benefits for the unemployed)

• Increase investments to boost economic efficiency (funding for long-term projects in industries like technology, alternative energy and healthcare)

• Provide funds for transportation, environmental and other infrastructure projects (generating both short-term jobs and long-term benefits)

• Stabilize state and local government budgets (helping them avoid decreases in services or tax increases).

Because the ARRA programs channel different types of funds to individuals, businesses and governments, it’s almost impossible to determine the overall impact to date, especially since a large chunk of the $251 billion authorized nationally for project contracts, loans and grants is still unspent.

But it is clear that Florida, the nation’s fourth most populous state, has received fewer stimulus dollars than might have been expected. On a per-capita basis, Florida received $598 in stimulus dollars per person compared with $817 for the nation as a whole. Those figures are far lower along the Gulf Coast: $345 in Sarasota, $340 in Manatee, $436 in Lee, $435 in Collier and $225 in Charlotte. 

Why are the region’s numbers so low? The answer is largely due to demographics. The Gulf Coast is relatively high in retirees and low in school-age children, while stimulus funds were aimed at working-age individuals and public school districts. In addition, one ARRA component focused on better weatherization of homes to improve energy efficiency—a program that helped homeowners in many Northern states, but meant little to Florida.

Winstead argues that looking at funding on a per-capita basis is misleading. Instead, he says, it’s better to compare the federal dollars with the size of the state budget. “States receiving more stimulus funds as a percentage of the state budget would see a greater impact than states receiving less,” he says, noting that Florida’s percentage among all states ranks 11th.

In any case, it’s likely that economists and historians will be debating the ARRA’s effectiveness for years to come. But critics of the program believe it was flawed from the start. 

Brian Riedl, lead budget analyst for The Heritage Foundation, a conservative think-tank in Washington, calls the stimulus a “complete failure.” He thinks government spending by itself cannot end a recession. “Every dollar injected into the economy has to come from taxes or dollars borrowed from the private sector,” Riedl says. “So the stimulus program has simply involved a redistribution of existing funds. It’s like borrowing $100 from your son and giving it to your daughter. It doesn’t make your family any richer.”

Riedl says that there’s very little the government can do to create short-term economic growth. “There is no lever the government can pull to create new jobs,” he adds. “But over the long term, the government can encourage productivity and private investment. One could make the case that if the ARRA investments in education, transportation and energy are successful, that would help the economy in 20 years.”

 

Tracing the flow of funds

Not surprisingly, Winstead takes a different view of the stimulus program’s impact on Florida. “I think the federal funds have been critical in terms of stabilizing state and local budgets,” he says. “If we had not had this money, it would have had a devastating effect on the state.”

In terms of jobs, Winstead notes that the White House Council of Economic Advisors originally projected that ARRA would result in 206,000 new and retained jobs in Florida. “The latest report in July showed a cumulative impact of 167,000 jobs,” he says. “Since there are still many months left in the program, it’s clear that we will exceed that number.” If you just look at jobs that have been created through ARRA, Florida ranks No. 1 with 61,725 new jobs, according to recovery.gov, the federal government’s official website that provides access to data related to Recovery Act spending. 

So why doesn’t it feel like there are more jobs being created along the Gulf Coast? One reason is that a large portion of the federal funds went directly to the jobless, through an extension of unemployment benefits and an increase in food stamps. “Nothing turns over in an economy more quickly than spending for basic needs, such as food and shelter,” Winstead says. “One of the goals of the Recovery Act was to help those people, and providing those benefits has made a difference to local economies.”

Another reason is that many of the funds still have not reached the private sector. Under the ARRA, most of the program and project funds were sent from Washington to Tallahassee for eventual distribution to local counties, cities and school districts. For example, funds for highway improvement projects had to pass through three levels of government before engineering and paving contracts could be awarded to companies that could actually put people to work.

In all, through Sept. 30, the five-county Southwest Florida region tallied 749 jobs, a paltry 1.2 percent of Florida’s total jobs attributable to ARRA, according to recovery.gov.

“When you dump that much money into a funnel, it can’t get through the process quickly,” economist Snaith says. “There is a time lag, even with shovel-ready transportation projects.”

However, Florida did make good strategic decisions on how to use those funds, according to Winstead. “In education, the legislature spread the stimulus dollars out over two full school years,” he says. “Other states spent all their money last year. That decision [Florida’s] has had a stabilizing effect on our K-12 schools as well as our state colleges and universities.”

In addition, Florida Department of Transportation (FDOT) devoted a higher percentage of its federal funding to long-term projects, unlike states in the snow belt that focused on resurfacing their roads. “If you look at our state’s transportation needs, the biggest issue is congestion,” Winstead says. “That means we need to build capacity by adding new lanes and roads. Those projects take longer to get going, but they create a larger number of jobs. Most importantly, they will pay off for Florida for years to come.”

Overall, Winstead says Florida’s rate of stimulus spending is consistent with national projections and state appropriations. “People are impatient to see results,” says Winstead. “But you have to remember that these programs are not over. They will continue to have a beneficial impact on Florida in 2011 and in years to come.”

Phil Borchmann contributed to this article.

Local stimulus winners

As superintendent of Sarasota County schools, Lori White says federal stimulus funds have had a major impact on public education. “It’s made a huge difference over the past two years,” she says. “I don’t know what we would have done without those dollars.”

For the 2009-10 and 2010-11 school years, the Sarasota district will receive about $45 million, primarily for teachers and support staffers. Thanks to the funding, the school district has been able to preserve more than 300 positions, including special education programs. “Our state will be slower coming back to a more stable economic revenue situation,” White adds. “Fortunately, Congress recently approved additional support for education, which will help us with next year’s budget.”

A recent analysis by ProPublica, an independent national nonprofit, shows that federal stimulus dollars in Manatee and Sarasota counties have largely been focused on education, transportation, energy and workforce training (see chart, pages 22 and 23). For instance, in Sarasota, the Suncoast Workforce Board received a $4.4 million grant to train laid-off workers.

In another example of stimulus spending, one of the largest photovoltaic (PV) solar energy collectors in the region was installed on the roof of a Manatee County Rural Health Services facility in Bradenton. Sutter Roofing in Sarasota completed the $240,000 project in August, according to Brad Sutter, vice president. “We put a new energy-efficient roof on the facility as well as installing the solar system,” he says. “It will help cut their power bills in the future.”

A $4.75 million stimulus grant allowed Sarasota Bradenton International Airport to complete an important maintenance project on its crosswind runway in early 2010, rather than delay the work for several years. “We were ready to go when the funding came out,” says Rick Piccolo, president. “As a result, we were able to get the bids out right away. The contractors who did the work hired about 100 people at one time or another.”

Another Sarasota project involves the upgrading of the Lime Lake stormwater pond into a neighborhood park, a long-standing request from area residents. In October, the county signed a $650,000 contract with D.E. Murphy Constructors, Inc., Sarasota, which includes ARRA funding.

In Recovery?

Tracking stimulus jobs and dollars in Southwest Florida.

U.S.

Total recovery funding: $251 billion

Funding per capita: $817

Jobs created: 671,607 (as of Sept. 30)

Unemployment:

9.6%* (September)

Florida

Total recovery funding:

$11.1 billion

Funding per capita: $598

Jobs created:

61,725 (as of Sept. 30)

Unemployment:

11.9%* (September)

Manatee County

Total recovery funding: $108.4 million

Education Department: $49 million**

Transportation Department:

$28 million**

Small Business Administration:

$11 million**

Environmental Protection Agency:

$9 million**

Agriculture Department:

$7 million**

Funding per capita: $340

Jobs created: 87

(as of Sept. 30)

Unemployment:

11.8% (September)

Largest Grant Recipients and Major Projects (as of June 2010):

Manatee County School Board, $14.1 million grant for public education, and $9.6 million grant for special education

City of Bradenton, $6.3 million grant for clean water capital projects

Florida Department of Transportation (FDOT), $6.1 million grant for traffic management software and system integration

Manatee County Area Transit, $4.6 million grant for hybrid trolleys on island routes and other projects

Sarasota County

Total recovery funding: $127.8 million

Education Department: $34 million**

Housing and Urban Development:

$29 million**

Transportation Department:

$21 million**

Small Business Administration:

$17 million**

Agriculture Department:

$7 million**

Funding per capita: $345

Jobs created: 171

(as of Sept. 30)

Unemployment:

11.9% (September)

Largest Grant Recipients and Major Projects (as of June 2010):

City of Sarasota, $23 million grant for purchase and rehabilitation of abandoned and foreclosed homes

Sarasota County School Board, $9.9 million grant for public education, and $9.4 million grant for special education

Florida Department of Transportation (FDOT), $9.7 million grant for highway lane addition and reconstruction projects

Sarasota County, $4.6 million grant for hybrid-electric buses and traffic management technology

Suncoast Workforce Board, $4.4 million grant for employment training to laid-off workers

Charlotte County

Total recovery funding: $35.4 million

Education Department: $13 million**

Transportation Department:

$10 million**

Housing and Urban Development:

$4 million**

Small Business Administration:

$3 million**

Government Accountability Office:

$2 million**

Funding per capita: $225

Jobs created:

9 (as of Sept. 30)

Unemployment: 13.1% (September, not seasonally adjusted)

Largest Grant Recipients and Major Projects (as of June 2010):

Charlotte County School District, $5.3 million grant for public education, and $3.9 million special education grant for special education

Charlotte Crossing, Ltd., $3 million grant for affordable rental housing projects

Charlotte County Airport Authority, $2.5 million grant for airport improvement program

Charlotte County, $2.1 million contract to purchase five hybrid diesel-electric buses and transit-related software applications

Lee County

Total recovery funding: $256.3 million

Education Department: $89 million**

Transportation Department:

$74 million**

Energy Department:

$30 million**

Small Business Administration:

$25 million**

Agriculture Department:

$13.8 million**

Funding per capita: $436

Jobs created: 231

(as of Sept. 30)

Unemployment: 13.5% (September)

Largest Grant Recipients and Major Projects (as of June 2010):

Florida Department of Transportation (FDOT), $34.8 million grant for new road construction, and 12.7 million and $11.2 million grants for adding highway lanes and road reconstruction

Lee County School Board, $26.8 million grant for public education, and $18.7 million special education grant for special education

Algenol Biofuels, Inc., $24 million grant for research on producing ethanol from hybrid algae

Southwest Florida Workforce Development Board, Inc, $8.6 million grant for employment training to laid-off workers

Collier County

Total recovery funding: $138.8 million

Education Department: $37 million**

Transportation Department:

$36 million**

U.S. Army Corps of Engineers: $29 million**

Agriculture Department:

$24 million**

Small Business Administration:

$11 million**

Funding per capita: $435

Jobs created:

251 (as of Sept. 30)

Unemployment:

13.3% (September)

Largest Grant Recipients and Major Projects (as of June 2010):

Harry Pepper & Associates, $28 million contract to restore the former Southern Gold Gate Estates as part of Comprehensive Everglades Restoration Plan

Florida Department of Transportation (FDOT), $27.6 million grant for new bridge construction

Collier County School District, $14.9 million grant for public education, and $10 million special education grant for special education

Multiple recipients, $5.7 million in loans for housing from the Agriculture Department/Rural Housing Service

SOURCES: Recovery.gov, the federal government’s official website that provides access to data related to Recovery Act spending; ProPublica, an independent, nonprofit newsroom at propublica.org; and Florida’s Agency for Workforce Innovation. *Unemployment figures are seasonally adjusted. ** Five largest sources of federal funding through May 2010.