Describes current state as “economic revival”
Outgoing Gov. Ed Rendell praised the impact of the federal stimulus program on Pennsylvania, citing its impact on transportation, green energy projects, education and health care as evidence.
“We have had four straight months of decline in our unemployment rate,” said Mr. Rendell.” We’ve seen revenue collections exceed estimates by significant numbers and…Pennsylvania ranks 11th out of the 50 states for job creation. There is no question in my mind the stimulus has contributed to that economic revival here in Pennsylvania.”
Mr. Rendell credited the stimulus money with creating or protecting 136,000 jobs in Pennsylvania. He also attributed $4.8 billion in business revenue across the commonwealth to the 4.5 million recipients of the Making Work Pay tax credit during the past two years, as well as $2.2 billion through business tax incentives.
He also said $4.6 billion was injected into the Pennsylvania economy through 1.2 million unemployed Pennsylvanians relying on extended unemployment compensation and $545 million came from 1.7 million recipients of food stamps.
“The stimulus has worked,” said Mr. Rendell. “It’s not popular to say that. It may not even have the ring of truth about it. But the stimulus has worked.”
Antony Davies, professor of economics at Duquesne University, objected to Mr. Rendell’s suggestion that individuals spending unemployment compensation and using food stamps was a sign of a recovering economy.
“Unemployment and food stamps are not stimulus tools – they are payments meant to help struggling families keep their heads above water,” said Mr. Davies. “To say that these payments are good for the economy…not only misses the point, but reduces struggling families to the status of economic pawns.”
Mr. Davies argued those payments could only be called a “stimulus” if the fact someone has to pay for them is forgotten.
“Gov. Rendell has spent so much time in politics that he has forgotten that money does not fall from the sky,” Mr. Davies said. “Every dollar the government spends on one person, it takes from the pocket of someone else. When the dollar makes a difference between a child eating or going hungry, we can argue that taking the dollar is the right thing to do. Characterizing welfare programs as “stimulus” is morally bereft and economically false.”
Mr. Rendell also praised the members of the Stimulus Oversight Commission, including Gene Barr, who is also vice president of government and public affairs for the Pennsylvania Chamber of Business and Industry. The future of the commission remains uncertain, said Mr. Barr, as governor-elect Tom Corbett has not given an indication of his plans.
“There [are] some dollars that need to be distributed before Corbett takes office,” said Mr. Barr. “How they do the oversights, whether they’ll continue to utilize the commission, I don’t know. We talked a little about that during in between some of the sessions today with [Chairman] Ron Naples [and] he’s communicated…some of the status to the transition teams.”
The next Stimulus Oversight Commission meeting is set for March 17, though Mr. Corbett may change that.
All told, Pennsylvania received $31 billion through the American Recovery and Reinvestment Act. Individual and business federal tax credits and benefits composed about $11 billion, and $16.6 billion was spent on highways and bridges, worker education, the environment, and other pet projects. The governor particularly emphasized stimulus funds that went to transportation projects, approximately $1 billion for 343 projects.
The state Department of Transportation faces an annual $472 million revenue shortfall, as a result of the failure to tax Interstate 80. Also, last year the Transportation Advisory Commission recommended an annual increase of $3 billion in transportation funding to deal with Pennsylvania’s aging infrastructure.
Stimulus funding will end in 2011.
The governor also spoke strongly of stimulus dollars spent on weatherization and green energy programs, including $201 million spent by PECO, a Philadelphia-area power company. Mr. Rendell said “these investments have changed the face of Pennsylvania and not just for a year or two, but for the long run.”
Mr. Rendell’s last day in office is Monday.
