The Great Stimulus Scramble

WASHINGTON -- In an age of "shovel-ready" projects, it seems everyone grabbed a shovel last week.

One digger was Ric Rotondo, who sees the federal stimulus plan as a potential bonanza for US Greenergy, the Wayzata firm he started to turn farm waste to fuel.

"It's like mining gold," Rotondo said.

Renee Mattson hopes to tap new spending on water projects to improve her snowmaking at Spirit Mountain in Duluth. "It's been the Wild West for everybody," she said of the flurry of stimulus applications.

Charlie Kyte, executive director of the Minnesota Association of School Administrators, said he can already sense people "elbowing each other to figure out who's going to get what part of these funds."

State and local officials across Minnesota are in overdrive, sorting out which projects qualify for which "buckets" of money from the $787 billion stimulus bill President Obama signed Tuesday.

Tom Hanson is Gov. Tim Pawlenty's point man refereeing the federal package.

The direct economic impact to Minnesota is estimated at more than $9.3 billion, counting an array of personal and business tax credits designed to stimulate spending and create jobs. But the part that's getting most politicians' attention is the $4.1 billion that will pass through state and local government coffers for a variety of specific purposes, from Medicaid and food stamps to highway construction and education.

Take the state energy program, a 10-person office tucked away in the Commerce Department in St. Paul. Until Tuesday, it handled less than $1 million a year in federal energy grants, plus $10 million in weatherization money for low-income families. Overnight, its budget jumped to more than $54 million in energy grants, and $134 million for weatherization.

"The hard work starts now," said Commerce spokesman Bill Walsh. The biggest challenge will be finding enough energy auditors to scope out the expected tenfold increase in home weatherization projects -- up to 35,000 from about 3,500 in a normal year.

"The program infrastructure is there," Walsh said. "There's just a lot of extra money flowing into it."

'Smoke-filled rooms'

But "shovel-ready" provisions require that half of the money be obligated by mid-June. That could change MnDOT's scheduling. What's more, significant chunks of the transportation money are controlled by urban planning agencies such as the Metropolitan Council.

Already, the battle lines have been drawn between traditional highway contractors and transit advocates who want to steer more dollars toward public transport, biking and pedestrian-friendly projects.

The transit camp is represented by Lea Schuster, executive director of Transit for Livable Communities. Her group will press for an open decision-making process that the public can see. "We recognize that we're one constituency with one set of principles, and that there are others who have different sets of principles," she said.

Jon Chiglo, MnDOT's highway program manager for the economic stimulus, promises that transparency will not be sacrificed for speed. "A lot of people think we do things in a smoke-filled room," he said. "But that's not the case."

State road builders who have to buy right-of-ways also must take care not to fall victim to speculators who might see an opportunity in the rush to create jobs. "If [a highway] is being extended and they need to spend the money in a certain amount of time, and they haven't bought your land yet, what are you going to do?" Hanson said. "You're going to jack up the price."

Hanson finds comfort in the thought that the bulk of the stimulus largesse -- like the new energy program money -- is being channeled through existing programs. Much of it is guaranteed to individuals who qualify for things like new tax credits, college loans and extended unemployment benefits.

But every energy-efficiency proposal competes against every other one; school modernization plans compete with other government priorities; water projects like Spirit Mountain's vie with similar projects around the state.

"I wish someone was going to write us a check for $6 or $7 million, but it's not that easy," said Mattson, executive director at Spirit Mountain, adding that the snowmaking project would conserve water for the city of Duluth and create 70 new jobs.

Members of Minnesota's congressional delegation have been traveling around the state to help constituents make sense of the 1,703-page bill, and in some cases to help tout local companies. Last week, Rep. Tim Walz, D-Minn., visited the Miller Felpax Corp. in Winona, a maker of railroad equipment, which could see a bump in business from the Obama administration's new emphasis on high-speed rail.

'Everyone is shovel-ready'

Municipal officials also are being deluged with special pleadings. "Understandably, when there is so much pain out there, there are people coming in with all sorts of ideas," said Minneapolis Mayor R.T. Rybak. "Unfortunately, many of them won't qualify."

Cities are also in the hunt for their share of new law enforcement grants, transit projects and school construction funds. The $668 million in total infrastructure spending allocated for Minnesota falls far short of the $983 million in "shovel-ready" project requests submitted by mayors across the state.

Rybak: All hands on deck!

Rybak has put Minneapolis on a crisis footing, setting up a work team like one it used after the Interstate 35W bridge collapse. "We're using a similar model to have all arms of the city working in one direction," he said.

At the State Capitol, House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said: "One of the concerns right now ... is making sure that we're truly ready to receive this money and have the capacity to use it."

"It is for a limited duration," said Steve Francisco, federal policy director at the Minnesota Council of Nonprofits, which has been tracking spending on social programs and human services. "This stuff ends after 2010."