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JEFFERSON CITY, Mo. (AP) — President Barack Obama’s latest jobs
plan calls for $130 billion in aid to state and local governments,
providing either a welcome infusion of cash for those struggling
with budget gaps, government layoffs and crumbling roads or merely
a temporary patch for budget holes that are likely to remain long
after the federal money runs out.
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The perspective of governors and state lawmakers varies but often
follows political affiliation, with Democrats generally praising
Obama’s plan and Republicans remaining skeptical.
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“It’s a no-brainer: Congress should pass the bill. Now,” said
California Gov. Jerry Brown, a Democrat, whose state would receive
some $13 billion for construction projects and teaching and public
safety jobs at a time when it has the nation’s second highest
unemployment rate.
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Many Republican lawmakers and governors are less enthusiastic about
accepting the federal money, especially if it locks in costs they
will have to account for once the aid runs out.
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“If we’re given the flexibility to spend it as we see fit and not
as they see fit, I could see some benefit,” particularly for
long-delayed infrastructure projects, said Missouri House Budget
Committee Chairman Ryan Silvey, a Republican. “I’m not a big fan of
using one-time money for ongoing expenses. I think that’s what the
state should be getting away from, not getting deeper
into.”
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Obama’s plan has to clear a politically divided Congress, which
could scuttle it entirely or enact bits and pieces of it. As
envisioned by Obama, state and local governments would receive $50
billion for transportation projects, $35 billion for school, police
and fire department payrolls, $30 billion to modernize public
schools and community colleges, and $15 billion to refurbish vacant
and foreclosed homes or businesses.
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It would mark the second, sizable infusion of federal cash to
states in less than three years, coming just as they are burning
through the last of the billions of dollars they received under the
2009 stimulus act.
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In many cases, states used the original stimulus money to fill in
for declining tax revenue and lessen or delay spending cuts for
public schools, health care programs and other services. But those
budget holes remain in many states as high unemployment persists
and government tax revenue remains lackluster.
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With another round of money, “the federal government may be able to
play a critical role in helping states close their budget gaps,”
said David Adkins, executive director of the Council of State
Governments.
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But he said the prospects for receiving the money appear “very,
very slim” given the focus on reducing government spending among
Republicans in Congress. He said state government leaders are more
interested in long-term stable federal funding for transportation
projects and education programs.
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In New Mexico, Democratic state Sen. John Arthur Smith said
provisions of the Obama proposal, such as infrastructure financing
for highways and aid to schools, should provide a short-term
economic boost for the state. But he worries that it could create a
future financial squeeze if state government needs to replace the
federal money when the program ends.
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He said state spending had to be cut this year to help close a $200
million budget gap created when federal stimulus money ran
out.
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“I’m one of those who would rather confront the enemy at hand right
now,” Smith said. “I don’t think we’re elected to push the issue
down the road.”
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State budget officials have only estimates of how much they would
receive under the Obama proposal, which was announced Thursday to a
joint session of Congress. They are waiting to learn exactly how
those dollars would be disbursed and what strings, if any, would be
attached.
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Some Republican governors already have established a precedent of
rejecting portions of the federal stimulus money.
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Wisconsin Gov. Scott Walker rejected $810 million in federal
funding for a high-speed rail line between Madison and Milwaukee,
and Ohio Gov. John Kasich turned down $400 million for a rail
project to connect Cincinnati, Cleveland and Columbus. Florida Gov.
Gov. Rick Scott canceled a $2 billion federal grant for a
high-speed train between Orlando and Tampa, citing concern that
state government would be locked into years of operating
subsidies.
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A state-by-state breakdown of the president’s plan shows that
Florida could receive more than $7.5 billion for schools, roads and
other projects. That money would come into a state with a 10.7
percent unemployment rate and one of the nation’s highest home
foreclosure rates. But Scott spokesman Brian Burgess left open the
possibility that the Florida governor could reject money under
Obama’s latest plan, especially if it added to the federal
debt.
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Republican Texas Gov. Rick Perry, who is running for president,
dismissed Obama’s proposal as wasteful spending and argued that
budget cuts were the only way to help the economy.
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“President Obama’s call for nearly a half-trillion dollars in more
government stimulus when America has more than $14 trillion in debt
is guided by his mistaken belief that we can spend our way to
prosperity,” Perry said.
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Perry has a history of rejecting federal money that would require
changes in state law. Last year he declined to accept $550 million
in additional unemployment funds because it would have required
Texas to adopt a more generous program.
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While it is not clear whether the Obama proposal would require
Texas to rewrite its unemployment laws, it would extend the
benefits of nearly 124,000 people in the state.
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Kansas Gov. Sam Brownback, a Republican who as a U.S. senator voted
against Obama’s 2009 stimulus legislation, did not say whether
Kansas would accept federal money under Obama’s latest proposal.
But he said the use of one-time revenue in the earlier stimulus
program created budget problems for the state when the funding
expired.
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Other governors, particularly Democrats, welcomed the potential for
more federal aid.
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“We need all the help we can get,” said Vermont Gov. Peter Shumlin,
a Democrat whose state remains devastated by flooding from the
remnants of Hurricane Irene.
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“I think the hopes that we had for our recovery have been stalled
for all kinds of reasons that are beyond Vermont’s control,”
Shumlin told The Associated Press. “But it seems to me that the
president’s package for job growth and infrastructure investment is
the right thing to help us avoid a double-dip
recession.”
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Maryland Gov. Martin O’Malley, chairman of the Democratic Governors
Association, said the president’s proposal includes some
job-creation ideas that have been supported previously by Democrats
and Republicans.
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“I think it’s pretty much a nonpartisan idea that a modern economy
requires modern investments in order to create jobs,” O’Malley
said. “There are things that we know will get people back to work –
rebuilding our infrastructure, rebuilding our schools, our bridges
our tunnels.”
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Ralph Martire, executive director of the Chicago-based Center for
Tax and Budget Accountability, said Obama’s plan to provide $4.5
billion for Illinois transit, construction projects and for
teaching, police and firefighting jobs could help the state’s
economy, based on historical evidence.
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“Spending money in the local economy creates a positive economic
multiplier,” he said.
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—
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Associated Press writers Scott Bauer in Madison, Wis.; Chet Brokaw
in Pierre, S.D; Gary Fineout in Tallahassee, Fla.; Dave Gram in
Montpelier, Vt.; Judy Lin in Sacramento, Calif.; Barry Massey in
Santa Fe, N.M.; John Milburn in Topeka, Kan.; Julie Carr Smyth in
Columbus, Ohio; Chris Tomlinson in Austin, Texas; Tammy Webber in
Chicago; and Brian Witte in Annapolis, Md., contributed to this
report.
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