Follow the stimulus
Stimulus dollars have poured into the Tri-Counties since President Obama signed the American Recovery and Reinvestment Act into law in February, with hundreds of millions of dollars in government grants and business contracts being divvied up among businesses and agencies throughout the region.
But whether all those taxpayer dollars have had an effect, in terms of creating jobs and a tangible economic benefit, remains to be seen.
Almost $470 million total in Recovery Act funds have come into the three counties since February.
Much of that money has been doled out in the form of grants to government agencies and institutions for everything from research funding at the area’s public universities to public works projects throughout the region.
The Santa Maria Levee improvement project is the largest stimulus-funded project in Santa Barbara County to date, with a $41 million price tag. According to figures released by the county, the project represents a $65 million boost to the local economy and will create or sustain more than 450 jobs in the region.
The University of California, Santa Barbara, has received more than $33 million in Recovery Act funds, most of that going toward science and health research. And Ventura County has received a grant and loan totaling $14.1 million for refurbishing a district’s wastewater treatment.
Follow the money
It’s not just government projects seeing the green, however. Some lucky tri-county businesses have also been the recipients of stimulus contracts and grants totaling millions of dollars.
Thousand Oaks-based Ceres, an energy crop developer, recently received $5 million in Recovery Act funds from the Department of Energy for energy crop research. Ceres was one of only 37 companies out of 3,700 proposals around the nation to receive the coveted grants.
The company will use the money for research related to energy crops such as switchgrass, sorghum and miscanthus. The project’s goal is to increase the yields of those crops by as much as 40 percent, while decreasing the need for agricultural inputs such as nitrogen fertilizer, said Gary Koppenjan, corporate communications manager at Ceres. As part of its broader effort to encourage green energy development, the Department of Energy grant will cover all the expenses related to the project’s research.
“One of the the president’s goals with the recovery act was to tie it into the green economy,” said Congresswoman Lois Capps, D-Santa Barbara. “Ceres got the grant because they had a green project ready to go, and because it will create jobs in Ventura County,” she continued.
Koppenjan couldn’t say how many new jobs the project might bring to the region, but did say that it would likely create work for existing employees as well as new hires, both locally and at the company’s other U.S. facilities.
San Luis Obispo County has received only five stimulus contracts totaling $1.7 million, but has received more than 100 grants for the public and private sector totaling $54.8 million. SLO County has received $56.5 million in economic stimulus.
Some of the winners include:
• The nonprofit Economic Opportunity Commission of San Luis Obispo received $1.5 million.
• Grover Beach-based Arroyo Instruments, which makes testing and measurement equipment for the research and development business, received $82,390 from the Department of Commerce for research related to LED lights. If successful, the research could lead to commercializing solid-state lighting — an innovation that would improve the energy efficiency of everyday lights.
Santa Barbara County
Santa Barbara County has received $169.9 million in recovery funds. Of that, 125 contracts totaling $21.9 million have been awarded, along with 195 grants totaling $148 million.
Private-sector recipients range from million-dollar technology grants to a few thousand dollars for erosion control. To name just a few:
• Santa Barbara-based security technology manufacturer Akela received $1 million from the Department of Justice for the development of a radar sensor system mapping the internal structure of buildings. The technology will be used by law enforcement when searching for suspects, during hostage incidents and for tactical surveillance.
• Carpinteria-based S&S Seeds received $23,662 for seeds provided for erosion control at San Antonio Creek.
• Santa Barbara-based nonprofit PathPoint received $247,162 for a senior employment program aimed at providing part-time, temporary paid positions in area nonprofits and the public for unemployed, low-income seniors.
Ventura County has received 11 contracts totaling $42.2 million and 181 grants totaling $200.9 million, for a grant stimulus total of $243.2 million.
A few winners there:
• Alberto Luna Construction in Ojai received $2.8 million from the Department of Defense for repairing barracks at Fort Irwin.
• Thousand Oaks-based tech conglomerate Teledyne Technologies received $700,000 from NASA for advanced infra-red camera development.
The net effect
There’s no doubt that hundreds of millions of dollars that would otherwise never have flowed into the region have done so thanks to the stimulus bill, but the actual effectiveness of that hefty taxpayer burden is up for debate.
Bill Watkins, director at the Center for Economic Research and Forecasting at California Lutheran University, said he is doubtful that the recovery act has had any real, discernible impact. “There doesn’t appear to have been any effect so far as I can see,” he said. “I don’t think this is going to go down in the history books as a recovery,” he continued, pointing to increasing job losses throughout the region.
Like the rest of California, the tri-county employment picture isn’t pretty. All three counties have lower unemployment rates than the state average of 12.2 percent but have seen those unemployment figures skyrocket since the onset of the recession. Ventura County is suffering the most, with 11.2 percent unemployment in August. San Luis Obispo County sits somewhere in the middle at 9.4 percent, and Santa Barbara is faring the best in the tri-county region at 8.5 percent unemployment.
But Capps said that she believes the stimulus has had a real and measurable effect in the region, even if the turnaround in unemployment is lagging.
“People are always a little skeptical of what we’re doing,” she said. “But we’re saving jobs.”
Watkins remains skeptical. “If fiscal policy is going to have any long-term impact, it needs to be focusing on creating long-term capital in the private sector,” he said.
Federal stimulus spending is mitigating the damage caused by California’s budget woes by saving local public sector jobs, Watkins conceded. But, he said, the fact remains that “productivity in the private sector is higher,” and much of the recovery effort going toward government agencies.
Watkins also said he is worried about tax increases that will likely follow in the future to pay off the large deficits the government is now racking up. He pointed to an economic model called the Ricardian Equivalence, which states that individual consumers anticipate future government deficits and tax increases — and increase their current savings as a result. If true, that would mean government stimulus efforts aren’t nearly as effective as their proponents would like to believe.
And, Watkins said, while many of the recovery projects may create temporary jobs and keep the shovels digging, they won’t do much to create long-term economic value or jobs. “We’re not talking about building the Hoover Dam here,” Watkins said. “A lot of these projects just seem to be the equivalent of digging holes and filling them back up.”
Capps contended that projects such as the $40 million Santa Maria levee restoration project are necessary and wise investments of taxpayer dollars. The project was already slated before it was awarded with stimulus funds, she said. “It created public and private sector jobs, and created an important public safety investment. It’s a win-win,” she said. “There’s nobody that’s going to say that’s wasteful.”
“Now, can I guarantee that there’s not a dollar wasted in these recovery efforts?” she continued. “No, I can’t guarantee that. But we do try to put these things through a strict approval process to make sure only worthy projects get funds.”