A Complicated New Deal

by Jack Craft



The federal stimulus package is an opportunity for businesses
willing to do the research.

Talk in the media about the multi-billion-dollar American Recovery and Reinvest- ment Act (ARRA) has left many in the private sector confused about how and when funds for “stimulus” projects will become available.  Unfortunately, those seeking immediate and definite answers are likely to become frustrated.
The ARRA is a 1,000-page source of funds for myriad projects in numerous pro-grams that are not easily clas- sified. Its monies will not be distributed in a consistent or predictable way. Timetables for spending also vary. 
For instance, transportation infrastructure dollars were al- located quickly through the existing state and local transportation agencies.  Tax breaks, additional unemployment ben- efits and similar programs were likewise implemented fast. These projects required little initiation to utilize. Others will take much longer. Broadly speaking, ARRA funding falls into three categories:

1) Budget Stabilization Funds;
2) Existing Federal Program Funds;
3) Competitive Grants. Money in the first two categories is dedicated to state and federal interests. State governments will decide how to spend funds for education and Medicare for instance. The business community has the greatest stake in funds that fall into the third category: competitive grants.
These substantial grants are dedicated to a variety of goals from expanding nationwide broadband capacity to increasing energy efficiency. Some will come available over multiple years; others obligated quickly. The competition for railway grants, for example, will be decided within months.    
For its part, the Obama administration has established a website that provides details and updates about the act, http://www.recovery.gov. Businesses must decide whether their products have funding potential, then access the site and find out which agencies are involved in determining how money for such projects is spent. Information resources are also available on the state level. Missouri has established a Jefferson City-based task force for implementing ARRA
and set up a website for public information, www.transformmo.gov. Kansas has also started
a site, www.governor.ks/recovery.
Kansas City has its own committee of city staffers to review the ARRA.  Businesses that want to participate in infrastructure projects would do well to be aligned with school districts and municipalities. The city expects disbursements from several new and existing funding stratagems like community development block grants and neighborhood stabilization programs. Proposals for many of the stimulus dollars must show that they are backed by contractors who can break ground tomorrow.
A handful of these oft-discussed “shovel ready” projects have  begun. Construction on a 1,000-foot bridge some 30 miles outside Jefferson City started moments after Obama signed the act. The Missouri Depart-ment of Transportation awarded APAC-Kansas
City the project, which is expected to cost about $8.5 million. 
However, the vast majority of grants have not yet been awarded. That’s partly because rules
governing these grants remain largely unwritten. Public pressure may have prompted the government to move quickly. The ARRA was adopted before the administration could staff the relevant agencies.
Businesses interested in applying for grants will need to engage in thoughtful research. First, it’s
necessary to identify a product that might qualify for funding. Then, businesses must find out which agency will govern administration of these grants. Finally, that business must negotiate rules with that agency. As these rules develop in the coming months, private businesses could play a role in how the federal “stimulus” is experienced on a local level.  For now, this is only the first chapter in a long and complicated ARRA story to come.

Jack Craft is a partner in the government relations practice of Lathrop & Gage
E     |    jcraft@lathropgage.com

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