Stimulus funds support more than just Iowa transportation projects

A public school teacher's job. A University of Iowa study of infectious diseases. Health care for low-income families.

The federal government's $2.5 billion plan for economic recovery in Iowa isn't all roads and bridges.

Health care and education account for 50 percent of the federal government's attempt to prime Iowa's economic pump. Transportation funds are just 16 percent of the state's share of the $787 billion America Recovery and Reinvestment Act, but they are the most visible signs of the stimulus at work in Iowa.

Much of the massive federal spending program's impact goes largely unseen, said Jon Murphy, director of Iowa's Office of State and Federal Relations.

The $421 million in additional Medicaid funding, for example, is “not something you will see in an overt way,” he said. “The impact of that will be what's not happening. ... We're not dropping people from Medicaid, we haven't reduced provider rates and we're able to maintain services.”

Without $40 million from the act to help the state make its recent $190 million state aid payment to local school districts, there would be teacher layoffs, Murphy said.

Slightly more visible is the $81 million Iowa received to weatherize between 7,200 and 9,300 homes.

“That's an impact of ARRA that will be felt long after the last ARRA dollar is spent,” Murphy said.

Iowa's $384 million in stimulus transportation funds allowed the Department of Transportation to let contracts of slightly more than $1 billion in fiscal 2009. In 2008, it let $643 million in contracts.

It's not clear, however, how many jobs are being created or preserved.

In the transportation sector, Scott Newhard doesn't see many contractors “adding to their tables of organization.” They've called back employees who otherwise wouldn't be laying asphalt and pouring concrete this summer, said the vice president of public affairs for the Associated General Contractors of Iowa.

Many of the asphalt or concrete overlays are small projects, “not season-long jobs,” he said.

David Scott is with the Iowa Good Roads Association, whose members include road builders. Many of them are busy, but he doesn't hear them talking about adding jobs.

He also works with the American Council of Engineering Companies - the firms that design and engineer road projects. Many of the “shovel-ready” projects either didn't require much engineering and design work, or those functions are being handled in-house by the DOT and local governments, he said.

“So it keeps the government engineers busy, but doesn't do much for the private sector,” Scott said.

He hopes the stimulus funds being spent this summer free up money to design and engineer projects next summer. So far, the firms aren't seeing that. The association's dues are based on employee numbers, which are down 10 percent to 15 percent from a year ago, Scott said.

No one will really know the job impact until October, when states have to report to the federal government, Murphy said.

The important thing to remember is that money flowing into Iowa right now is just the beginning of the stimulus effort, Murphy said.

“We shouldn't think of ARRA as a start date and an end date,” he said. “The impact will be felt for a very long time. We're just getting started.”