As federal stimulus funds trickle in, jobs are slow to follow
In April, Louisville’s unemployment rate reached 10 percent, the highest it’s been since 1985. Union leader Joe Wise was not surprised by the news, saying that dire statistic reflects the growing number of construction workers who remain unemployed after developers halted several local projects due to last year’s credit crunch.
In response to the worsening job market, Gov. Steve Beshear issued an executive order extending unemployment benefits by an additional 13 weeks, a move that will help ease the sting, but only temporarily.
“I think the mood of the people in general is low, but we’re starting to see some optimism and things are starting to happen,” says Wise, secretary-treasurer of the Greater Louisville Building and Construction Trades Council, a union representing more than 12,000 construction workers. “Whatever it is, however, it needs to happen quicker, because when that unemployment runs out these people are going to need a place to get back to work to take care of their families.”
And that’s where federal stimulus dollars come in, although it remains unclear exactly how many local jobs will be created as a result.
When Congress passed the $787 billion federal stimulus package in February, city officials estimated Louisville would receive about $200 million to spawn numerous job-creation projects. Mayor Jerry Abramson responded by launching Louisville at Work, an initiative to oversee and prioritize the various public works and construction projects to be funded by stimulus dollars.
So far, Metro government has received $25 million in federal stimulus money, which has been allocated to rebuild a pumping station in west Louisville, to build a green TARC maintenance facility and buy a fleet of 10 hybrid buses, and for several long-term sidewalk and road projects.
“It’s coming in from various pots, and we should have most of that money in the next year and a half to two years,” says Chris Poynter, spokesman for Mayor Jerry Abramson. “But we expect most of it this year.”
At this point, however, Poynter says it’s too early to estimate how many jobs will be created by stimulus projects in Louisville.
The first stimulus-funded project in the city will be construction of the new TARC maintenance facility. Bids have already been submitted for the project and officials expect construction to begin this summer, creating about 330 jobs.
Not everyone is satisfied with the overall progress made thus far, and some critics say the city needs to deliver more shovel-ready projects to put the unemployed back to work.
“The stimulus package was sold to the public on building infrastructure, things like roads, sewers and dams, which will be there for years and years,” says Metro Councilman Kelly Downard, R-16, who sits on one of 10 Louisville at Work subcommittees. The councilman says that although he has heard a lot of grand totals being talked about, he has seen very little job creation: “We don’t get a list of projects, just a big total, so I’m skeptical.”
Although Downard is not satisfied because there is no detailed list of projects, state and city officials have named a handful of specific ways they would like the stimulus money to be spent.
Last month, Jim McGovern, a senior adviser to the mayor, reported to the Metro Council on the city’s long-term stimulus wish list. The list includes major road improvement projects, including $13 million to improve the Gene Snyder Freeway and $70 million for Interstate 64. In addition, however, he mentioned that state officials plan to use $990 million in stimulus dollars to save Kentucky’s Medicaid program.
That’s exactly the kind of spending Downard feared — using stimulus funding to salvage programs rather than put people back to work. The councilman also worries that the bulk of these local stimulus projects will not be started anytime soon, meaning they might never come to fruition. Federal guidelines strictly mandate a two-year, “use-it-or-lose-it” deadline for stimulus dollars intended for job-creation programs.
Among those confident that projects will start on time are labor leaders like Wise, who knows firsthand that coordination in Louisville began early. Last November he and other local officials met with Democratic U.S. Rep. John Yarmuth, of Louisville, and House Majority Leader Steny Hoyer, D-Md., to discuss what type of jobs could be available quickly.
Wise also commends the mayor’s office for organizing Louisville at Work so early, which he says demonstrates Metro government is serious about launching stimulus-funded projects as soon as possible.
For now, he remains optimistic about the future given the swift action taken by the federal government and the governor’s13-week extension of unemployment benefits. “We’re close to hitting bottom right now,” Wise says. “But I believe if you look at leading indicators things will turn around soon enough. In my opinion, within the next six months we’ll be out of this recession and back to work.”