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The Economy Today: $8,000 in Produce?

News from Las Vegas, Oklahoma, California, and elsewhere
June 23, 2009

In national headlines, a new Washington Post-ABC News poll finds that confidence in the stimulus package is ebbing, with 52 percent saying the stimulus “has succeeded or will succeed in restoring the economy,” compared with 59 percent two months ago. The decrease, The Washington Post notes, has been more accentuated in the Midwest: “fewer than half now see the government spending as succeeding,” as opposed to the six out of ten Midwesterners who thought so in April.

USA Today reports that foreclosure rates in forty of the nation’s most household-dense counties have doubled from last year, noting that these incidences—which included Boise, Idaho and Green Bay, Wisconsin—were far from the bad-mortgage epicenters and were more likely related to the rise in unemployment.

The Los Angeles Times reports that big-city mayors are complaining that the stimulus package is favoring rural areas over metropolitan regions in the competition for funds. A report released by the U.S. Conference of Mayors concluded that cities have gotten “a disproportionately small share” of the federal money set aside for road and other transportation overhauls—of a pot of $18 billion set aside for transportation, the eighty-five most populous metropolitan areas had received $8.8 billion (48 percent of the total), while accounting for 63 percent of the country’s population and 73 percent of the GDP.

Meanwhile, The Business Insider has a slide show of the ten most expensive stimulus projects in the country (based on a ProPublica report last month) and they’re all about highways, overpasses, and on- and off-ramps, with the top three in California, including Los Angeles and Oakland.

The Las Vegas Sun reports that schools in the Las Vegas area are making sure the stimulus money they will receive can’t be taken away. Over the next two years, Clark County schools will receive $57 million in Title I money, funded through the stimulus package. Because it’s a two-year allocation, the feds have told districts that the money can’t be used to buy computers or instructional supplies—”anything that might wind up on a moving truck two years down the road.” The money, instead, will be used to improve student-teacher ratios and to fund after-school tutoring, among other things.

In Oklahoma, Muskogee-area schools will be able to buy new food service equipment with federal stimulus funds funneled through the state’s education department, according to the Muskogee Phoenix. The funds were awarded specifically for child nutrition. Among the specific items approved for purchase: $2,680 for a garbage disposal, $34,794 for a combination oven, and $37,397 for a walk-in cooler-freezer combo.

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Maryland community paper The Gazette reports that while the National Institutes of Health “normally would have been required to allocate 2.5 percent of its external research and development dollars to the Small Business Innovative Research and Small Business Technology Transfer programs as part of receiving stimulus money,” the federal government has exempted NIH from that requirement. As a result, small biotech firms are losing out on up to $200 million in grants they might otherwise have received in stimulus funding.

Finally, a story about the complications that can arise after stimulus money has been awarded. The Silicon Valley / San Jose Business Journal reports that the local nonprofit Loaves & Fishes, which provides free meals to families and seniors, has thirty days to spend $8,000 in stimulus funding in order to be eligible for an added $8,350 (and after that, it only has two more months to spend the rest of the money, which comes from FEMA). Among the logistical problems: the money must be spent on food, not on operational costs, and the windfall means the agency will have to fundraise to pay for extra costs, like renting a warehouse. Says executive director Christina Egan, “I don’t have a year’s worth of storage for food or the freezer space.” Finally, buying $8,000 of produce isn’t practical, and so while Loaves & Fishes is known for providing fresh and hot meals, it will be buying much more canned food.

Jane Kim is a writer in New York.