How Governors Bill Richardson and Susana Martinez Spent $58 Million in Discretionary Stimulus Funds
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Whether you call it “government services funds” or “walking around money,” Governors Bill Richardson and Susana Martinez have spent all but a few dollars and change of nearly $58 million the Obama stimulus gave the governors to spend as they pleased. A one-time appropriation in the 2009 American Recovery and Reinvestment Act created a $53.6 billion State Fiscal Stabilization Fund to help states and local governments stabilize shaky finances, primarily in education budgets, and continue the delivery of essential services. Those funds were allocated to the states on the basis of population. Within the SFSF was a smaller allocation (18.2%) directly empowering a state’s governor, without the oversight of the state legislature or federal agencies, to allocate the funds as he or she chose. Only a few uses, such as paying down debt, are specifically prohibited. In the case of New Mexico, the Governor’s discretionary fund came to $57,945,507.
What Was That About “Shovel Ready” Jobs?
The Recovery Act was intended to directly address the nation’s severe recession by creating or saving jobs. Every recipient of stimulus funds–even state and local governments–was required to report on a quarterly basis the number of full-time jobs (or fraction thereof) supported by the federal funds. Those jobs were reported at recovery.gov, the federal government’s clearinghouse for information tracking the $787 billion stimulus.
But the governor’s discretionary funds fell through the cracks. Governors around the country have not submitted the same information as other stimulus funds recipients. The job impact of allocations of governors’ discretionary funds remains pretty much a mystery.
Here is how Governors Bill Richardson and Susana Martinez have spent their stimulus discretionary funds.
Bill Richardson got the first shot and spent most of the discretionary funds. We looked at his discretionary spendingin March 2010, a year after passage of the Recovery Act. That earlier report was incomplete as Richardson was still in the process of making decisions how who would receive these stimulus funds. One of Richardson’s largest discretionary allocations we reported at the time, his $10 million “Solar Schools Initiative,” was later “de-allocated.“ Other sources of stimulus grants were apparently used to pay for the installation of solar panels at New Mexico public schools.
A review of the final tally shows that most of Richardson’s spending seemed to fit the intent of the State Fiscal Stabilization Fund, such as his $20 million allocation to plug holes in the Corrections Department budget, $3.1 million to cover budget shortfalls in the Child Care Assistance Program, and $2 million to fund the General Assistance Program for struggling New Mexicans.
But other allocations reflect the fact that this fund was truly discretionary, with no one holding the Governor accountable for following the intent of the State Fiscal Stabilization Fund.
Richardson’s second largest discretionary allocation was $4 million to purchase land for the College of Santa Fe, now the Santa Fe University of Art and Design. The college had been a faltering private institution whose management problems preceded the economic downturn of 2008. Richardson used the money to buy land adjacent to the college to help the city of Santa Fe cover the costs of acquiring the troubled business.
He allocated $1,750,000 to fund new construction and renovation at Los Luceros, a 178 acre property owned by the Department of Cultural Affairs with the aim of improving the property so it could be used as a film career training center. As reported by Rob Nikolweski of Capitol Report and others, that project thus far has not produced desired results. This project could hardly qualify as plugging a hole in education budgets or allowing New Mexico to continue the delivery of essential services.
Richardson gave a $200,000 grant to fund pre-planning and public relations for the 2011 Santa Fe International Folk Art Market, Inc.. This outright gift of state monies to a private corporation might have been illegal under New Mexico’s anti-donation clause. But because these were federal funds with few strings and no anti-donation prohibition,Richardson was able to do what state law might have prevented.
The Magnanimous Martinez
Current Governor Susana Martinez got to spend what Richardson left behind. She has spent $16,175878.46 on projects such as filling budget holes in the Regulation and Licensing Department ($14,183 to prevent a furlough), funding the Graduate New Mexico! initiative ($6,312,877), child care assistance and services ($2 million), supplemental fuel spending for the Department of Public Safety ($823,500), and supporting domestic violence programs ($200,000). Most of her projects either clearly or arguably meet the purposes for which the federal government gave the money to the state.
But like Richardson, with no constraints on her use of the funds, Gov. Martinez has also engaged in some allocations which at least arguably demonstrate the lack of controls on use of the money. Her unrestrained largesse, though, has been minimal in comparison to Richardson’s questionable allocation of millions of dollars.
Her largest questionable expense was a $250,000 allocation in August 2011 “to assist with costs of the 2011 New Mexico State Fair.” The notice of government funds allocation gives no more explanation than that, and does not specify how the money was to be used by the State Fair. While many New Mexicans may hold the State Fair close to their sentimental hearts, it is questionable whether it qualifies as an essential government service.
Martinez also gave $43,750 to cover a budget shortfall at Santa Fe’s Lensic Theater, a private non-profit corporation. Having federal funds at her disposal allowed her to give money to a private entity without violating the anti-donation prohibition applicable to the use of state funds.
The Final Tally
Only $21.64 cents of the nearly $58 million remains unspent by both governors. Here is the all but final tally. Each entry is linked to the “Notice of Government Fund Services Allocation” signed by the Governors and describing the allocation’s purpose and recipient. (courtesy NM Office of Recovery and Reinvestment)
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Tags: American Recovery and Reinvestment Act, anti-donation clause, ARRA, Bill Richardson, College of Santa Fe, government stabilization funds, governors's discretionary stimulus, Los Luceros, recovery.org, Santa Fe University of Art and Design, stimulus, Susana Martinez
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