WNC gets less stimulus while better-off eastern NC fares well (Asheville Citizen Times)
August 2, 2009
Joel Burgess and Michael McGlone
High hopes surrounded the field in central McDowell County where an overgrown blackberry patch overlooks Interstate 40. County officials wanted federal stimulus money to help build a road and turn the land into an industrial park. Manufacturing jobs have formed the economy's bedrock, but those have been disappearing as employers like Cobia Boats and Spectrum Yarns have closed.
Despite a 16.1 percent unemployment rate — the state's third-highest — McDowell got no stimulus funding for roads. Counting all types of stimulus, McDowell ranked 92nd out of North Carolina's 100 counties in funding per resident, according to a Citizen-Times analysis of state figures released this month.
Dozens of other counties with high unemployment got small shares of the $3.2 billion received in the state, while better-off counties raked in far more, the analysis found. Governments and businesses in North Carolina have spent $1.3 billion in stimulus money so far. A total of at least $8.2 billion is expected over three years.
The Citizen-Times looked at spending per capita and other factors, such as unemployment and wage earnings. Findings include:
• Western North Carolina lagged in funding compared with other regions in the state. All 10 counties getting the most money per person are in eastern North Carolina.
• Of those top 10, eight are clustered in the northeastern corner of the state. Four of the top five lie in one of North Carolina's 50 state Senate districts — the 1st District, represented by Marc Basnight, a powerful Manteo Democrat and the leader of the Senate.
• Of western counties, Swain had the highest per capita amount, with $836 per person, and McDowell the lowest, with $186 per person. The state average was $328.
• Coastal Hyde County got $2,824 per person, the most in the state, despite having the lowest unemployment rate.
• Of the 10 counties with the highest unemployment rates, including McDowell and Rutherford, seven received less than the state per capita average.
• Dare County received the fifth-most stimulus money per person but is not considered economically distressed, according to federal standards.
Numbers for stimulus money distributed through June came from the N.C. Office of Economic Recovery and Investment.
Asked for help
McDowell officials say they're not sure why the county missed out on a higher share of stimulus money. County Manager Chuck Abernathy said he suspects richer counties with more staff were better able to get applications ready for projects. “The counties with less resources that couldn't go out and get designs and applications ready might have been at a disadvantage,” Abernathy said. Large, experienced government staffs likely did play a role in bringing cash to certain counties, said Jim Edwards, executive director of Isothermal Planning and Development Commission, a state-created regional planning group made up of four counties, including McDowell and Rutherford.
Speed also was probably important, Edwards said. Because the federal government wanted the money spent quickly, the state often selected projects with some planning already completed, he said. McDowell officials are still looking for money for several projects, Abernathy said, including broadband Internet, a homelessness prevention grant and a waterline for the Nebo community, where private wells are running dry.
Not far from where a line ends in Nebo, about 20 homes along Harmony Grove Road have had to cut back on washing clothes and flushing toilets, Abernathy said. If stimulus funds don't come through, about $275,000 will have to be found from some other source, he said.
Need not always important
North Carolina has viewed federal stimulus money as way to make infrastructure improvements, stabilize the state budget and boost the economy. While much of stimulus is supposed to help create and save jobs, for most types of funding there is no requirement that money be funneled to the hardest-hit areas, said Perry Morgan, president of the stimulus watchdog group Capital Monitor in Raleigh.
“You would hope the money is going to areas with problems, but there's nothing in the guidelines to say it should,” Morgan said. Gov. Bev Perdue, in an interview with the Citizen-Times, said the state distributed the portion of the $3.2 billion it controlled based on officials' understanding of federal requirements. “The big money went to highway projects which were shovel-ready,” she said. “That piece of the legislation was very clear.”
But while most stimulus allocation is not based on county needs, federal legislation behind road funding is an exception. Highway money, according to the American Recovery and Reinvestment Act, is to be given to projects that can be completed in three years “and are located in economically distressed areas.” But that hasn't been the case in North Carolina, where many poor counties got little or no stimulus funding for roads and bridges. Scotland County, with the highest unemployment in the state at 17.2 percent, got $76 per person in money for roads. Twelve counties with more than 13 percent unemployment, including McDowell, Rutherford and Graham, got no road money. Five of the top 10 counties in road money spending per person, meanwhile, had unemployment rates lower than the 11.1 percent state average.
Projects on the coast
Hyde County, which received the second-most road money at $832 per capita, had the lowest unemployment rate in the state at 6.2 percent. The county won two road projects, both on Ocracoke Island. One will spend $3.3 million to resurface N.C. 12 down the length of the island and widen it to accommodate bicyclists.
More than just roads will benefit in Hyde County. The single biggest project is $5 million for flood mitigation in the Swan Quarter watershed, and another $2.1 million will be spent in the Mattamuskeet National Wildlife Refuge. Hyde won more total stimulus funding per resident than any other county, followed in the top 10 by nearby Pasquotank, Camden, Dare and Tyrrell, all with below-average unemployment. That region has a powerful ally in Basnight, whose state Senate district includes all five counties.
Spokesman Schorr Johnson downplayed Basnight's role in securing the money, saying spending formulas rather than Basnight's top spot in the Senate are responsible. “Sen. Basnight's office has written letters of support for projects across North Carolina without bias of the location,” Johnson said, “because a job created anywhere in North Carolina is a good thing.”
Formulas, other issues
Federal rules have a lot to do with the disparity, said Dempsey Benton, director of the N.C. Economic Recovery Office, which oversees stimulus spending in the state. “Funding was not designed to be distributed on a per-capita basis,” Benton said. “Many programs have pre-set formulas. In some areas, they're associated with levels of service needs.” School funding, for example, is based on the number of poor and disabled students and may not directly correlate to unemployment. Some stimulus money in the state goes directly from the federal government to federal institutions, like national parks and military bases, and has a disproportionate effect in some counties, Benton said.
U.S. Rep. Heath Shuler, D-Waynesville, blamed the disparities on state and federal formulas that he said have shortchanged Western North Carolina's roads and other needs for years. He said lawmakers in Raleigh and Washington are trying to change that situation. “We're fighting all we possibly can to get these federal dollars to our end of the state,” said Shuler, who represents 15 western counties.
He said his status as one of seven Democrats in Congress to vote against the $787 billion stimulus hasn't hurt the region's efforts to win a share of it. Overall, Benton said, projects like interstates in one county can help other places, creating “more jobs and improved infrastructure, benefiting our interconnected state as a whole.”
David Walker, chairman of the McDowell County Board of Commissioners, is among those who think more money should go to those counties that are suffering the most. “We've got people who are ready to work here — good, decent, hard-working men and women,” Walker said.
Perdue agreed. The governor said she wants to make factors like unemployment and low wages a priority with future funding distribution. That is one reason she asked the Economic Recovery Office to assemble the county-by-county numbers. “There's going to be other big money coming into the state, and I actually am lobbying very quietly for … another kind of formula that skews it toward income and unemployed,” she said.
Staff writer Jordan Schrader contributed to this report.
Additional Facts
Making the calculations
Data on unemployment was through June and came from the N.C. Employment Security Commission. Information on economically distressed counties was through May 12 and came from the U.S. Bureaus of Labor Statistics and Economic Analysis.
