09:27 PM PST on Friday, February 26, 2010

By BEN GOAD and DUG BEGLEY
The Press-Enterprise

In its first year, President Barack Obama’s $787 billion stimulus program hasn’t been the quick cure proponents had envisioned for the Inland area’s ailing economy, an analysis of state and federal data shows.

Of roughly $1.15 billion in stimulus funds promised to agencies and businesses across the region, less than one-third has been received and only about one-sixth has been spent, according to the stimulus data.

“The spending part has not really come fast enough to arrive during the recession,” said Jerry Nickelsburg, a senior economist at the UCLA Anderson Forecast.

Many Inland projects face delays involving bureaucratic red tape. Others have been started but haven’t put people to work as quickly as predicted, such as a nearly $213,000 plan to revamp the Hemet Police Department’s dispatch and computer systems.

While the legislation has slowed Inland job losses, the region’s 14 percent unemployment rate is 1.6 percent higher now than when Obama signed the stimulus bill into law last February.

Local officials conceded there have been struggles and said more jobs are coming. But state and local officials again face budget shortfalls, and the stimulus money that buoyed spending this year won’t be there next year.

The region’s economy has been in a tailspin. For most of the last year, Detroit has been the only metropolitan area with more jobless workers than Inland Southern California. And since the Inland area sits at ground zero for the national housing collapse, this area emerges as a proving ground for the stimulus.

“If this stuff is going to help an area, ours is an area that it should be helping,” said John Husing, a Redlands economist who tracks the region’s business growth.

The stimulus bill — the largest of its kind in American history — is meant to revitalize the nation’s sputtering economy through a combination of tax cuts, aid to states and an array of big-ticket public works projects touted as a way to create or preserve millions of jobs around the nation.

The legislation, known officially as the American Recovery and Reinvestment Act, has clearly eased the area’s fiscal pain, officials and experts said. Local recipients have attributed more than 3,500 jobs to the effort, most of them teachers and police officers who otherwise would have been laid off.

“Even though the recovery act was designed to get the money out quickly, I have seen up close that on a federal and state level it is difficult for government to turn on a dime,” said Laura Chick, California’s inspector general for the Recovery Act.

“I do believe that in the coming months we will see the bulk of the stimulus dollars hitting the streets and hopefully reviving our economy,” Chick said.

Waiting for Work

Stimulus project progress has been stymied by a combination of regulations and necessary state and federal approvals, local officials said.

Road widening and bridge projects that met the criteria for stimulus money spent months navigating the needed clearances from state and federal environmental offices, then waited as bids were solicited and then contracts were signed.

The region’s largest road project, to widen Interstate 215 through downtown San Bernardino, started in September and was one of the first local projects to begin. But weeks passed before workers starting showing up on the side of the road.

“There is no such thing, I think, in this state as shovel ready,” said Husing, who blamed California’s regulations — environmental and otherwise — which he described as burdensome and ever changing.

Eric Alborg, spokesman for the state’s Recovery Act task force, defended the state’s handling of transportation funding, saying money has been directed toward 900 projects around the state.

Murrieta’s stimulus-funded replacement of the Clinton Keith Road bridge spanning Interstate 215 did not start until December, as officials spent three months wading through paperwork to get the go-ahead from federal officials.

It was worth it, said city public works director Pat Thomas.

“The stimulus program filled in a needed source of funds,” Thomas said. “Otherwise the project could have been delayed even further.”

An initiative to lower households’ energy costs and reduce dependence on fossil fuels through the weatherization of homes has also started slowly, according to a federal report released last week.

The report, issued by the U.S. Energy Department’s Office of Inspector General, found that only about $368 million of more than $4.7 billion set aside for the program had been used.

In California, the process had been completed on just 12 of more than 43,000 homes identified for weatherization, according to the report. State mandated work furloughs were blamed for part of the delays.

Alborg disputed the figures cited in the report, saying weatherization had been completed on 282 residences and an additional 700 were being completed.

Retention, not creation

For many of the most noticeable stimulus-related allotments, the economic benefits have not been based on creating jobs but keeping current employees working. Schools, city police departments and construction companies have all received money, but most reported avoiding the majority of layoffs rather than adding workers.

“Many school districts were having to look at cutting,” said Christine McGrew, spokeswoman for the San Bernardino County Superintendent of Schools office. The stimulus acted as “somewhat of a lifeline” to programs like art and music that were on track to be cut.

Putting it toward salaries was a natural fit because 92 cents of every dollar spent by the Riverside Unified School District is on personnel, said Mike Fine, the district’s deputy superintendent.

“If we were going to spend it on facilities, there would have been a significant delay,” Fine said, noting the time it takes to design and build schools and other buildings. “Washington was pretty clear; they wanted to save jobs.”

Creating jobs en masse was more difficult, officials and companies hired to do the work discovered.

When Brutoco, a Fontana-based contractor, won a stimulus bid to build an extra lane on Highway 91 from Orange County to Corona, people outside the company declared that the project would create 800 jobs.

A week later, when work was set to begin, about 100 people lined up outside the firm’s office looking for work, said Michael Murphy, the company’s 59-year-old president. Sometimes workers still inquire, he said.

But most of the work went to existing employees who risked losing their jobs without another bridge to build or road to repave. Murphy estimated about two dozen workers were hired.

“Does (the stimulus) create more jobs? My answer is that it keeps us from laying off people sooner,” Murphy said.

jobs coming soon

Other agencies that received stimulus money also faced slow going at first. But with the initial hiccups of handling federal money out of the way, many said they are preparing for a productive first six months of 2010.

“So far it has been off to a slow start,” said Patricia Nickols, director of Community Action Partnership of San Bernardino County, which provides assistance to low-income individuals and families. “But now we’re getting out of the gate.”

The agency received $10.39 million for community projects, including $4.47 million to weatherize homes. Nickols said she plans to hire up to 22 people in addition to the 18 already installing energy-efficient windows and doing other home projects.

“If there is an unsafe appliance in the home, we can replace that,” Nickols said.

A $4.1 million grant pays for training and hiring young workers, mostly teenagers, Nickols said. Another agency the partnership funds is building a community garden, she added.

Projects planned by other agencies ranging from road improvements to university research also will begin in the coming months. A groundbreaking was held Friday in the Coachella Valley for intersection projects along Interstate 10. In June, work is expected to start on the Interstate 215 interchange with Highway 74 south of Perris.

Jobs across many facets of stimulus spending will start appearing faster, said Cindie Perry, a management analyst spearheading Riverside’s citywide stimulus projects.

“Within the next couple of months, there is definitely going to be jobs created,” Perry said, noting energy efficiency projects set to begin in Riverside.

Some signs already are showing the recovery act is beginning to hit its stride in some areas, such as keeping police on the street. The nonpartisan Congressional Budget Office this week issued a report indicating that the legislation added as many as 2.1 million jobs to the nation’s economy in the last quarter of 2009.

Locally, the 14 percent unemployment rate actually reflects a decrease from its 14.7 percent peak in October and the previous reported rate of 14.2 percent in December, a signal that that jobs might finally be returning to the region.

“The money’s on the way — it’s been allocated and it’s going to happen,” said UCLA’s Nickelsburg.

Hard Landing

But as new jobs are created, the ones the stimulus saved are again on the chopping block. State officials used $8.5 billion to offset shortfalls in California’s fiscal 2009-10 budget. Though Gov. Arnold Schwarzenegger is angling for $6.9 billion from the federal government to help close a $20 billion state budget gap, many believe the state’s take from Washington will be far less.

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