What do you think ARRA’s shortcomings are?
ES: The ARRA was like a shot of adrenalin intended to stimulate a rapidly weakening economy at the time. The ARRA was never envisioned to be a long-term cure. Therefore, much of the funding was disbursed into defined projects, with a specific scope to be executed within a specific time period. That said, the act does not provide for the wherewithal to sustain our creations over the long haul. I suppose that the bet was that the economic recovery would have been further along at this time. The reality is that we might have created fiscal obligations resulting from our ARRA projects that will be a challenge to maintain.
SV: ARRA could have done more to encourage and empower state governments to improve their operational infrastructure, including technology. ARRA funds were distributed through existing structures without a real analysis of how efficient those mechanisms were. The federal and state governments should invest in creating structures for program management that are more uniform, technologically advanced and more reflective of best practices to ensure that future stimulus dollars are spent in the most economically efficacious manner.
JS: There is not enough vertical construction. Vertical construction employs many different trades and involves everyone from architects and engineers to steelworkers and laborers. I would have liked to see more investment in areas like infrastructure and municipal facilities.
What were its strengths?
JS: Every agency in Massachusetts knows that stimulus is a top priority of Gov. Patrick. They also know that the money has time limits. This forced our departments and agencies to be very creative and efficient in the execution of ARRA programs and projects. If we continued to do business the “way it has always been done,” we never would have met the time constraints. Many important lessons were learned in this process, and these are lessons that we are in the process of applying to all of state government even as the ARRA program winds down. In the areas of transparency, civic engagement and efficiency, tremendous gains in particular have been made in the ARRA program. The experience of designing metrics that are used to compare dissimilar government programs and of designing the technology to allow the collection and analysis of that information to be done with literally millions of bits of information will have long-lasting positive effects.
What would you have done differently if you were disbursing stimulus funds?
SV: I would have required all governments and entities receiving or distributing ARRA funds to be able to account for those funds in accordance with generally accepted accounting practices through an enterprise resource planning system or the equivalent thereof. Further, I would have tried to get consensus judgment from top economists on how to evaluate the stimulative effect of different investments. There should have been an estimate of the multiplier of effect of given investments, and subsequent accountability measures to determine whether the projected economic activity occurred.
JS: I would have given governors much more discretion to direct funds in the areas that were priorities of each state. The expenditure of funds was fairly narrowly proscribed by Congress with only a portion of the State Fiscal Stabilization fund able to be applied to any legitimate government function. What is a priority for Nebraska may not be a priority for Massachusetts, which would be different again from New York and Nevada. I’d put more faith in our governors.
In your state, do you think ARRA funds were spent correctly or do you think they could have been better used elsewhere?
ES: In the state of Maryland, ARRA opportunities were distributed between numerous agencies, programs and disciplines including education, public safety, health and human services, transportation, environment, housing, technology and others. Tens of thousands of Maryland jobs will be created or have been saved, while millions of citizens have or will have received some direct or indirect benefit from programs or projects spawned by the ARRA. Was the act the only and most perfect tool in the shed for fixing the most severe economic crisis experienced in decades? Obviously it was not perfect and not the only, but definitely necessary and darn good.