Lieberman: How Do We Get the Money Rolling?

Four witnesses sat before Senator Joseph Lieberman, chairman of the Homeland Security and Governmental Affairs Committee on April 7 at the Learning Corridor in Hartford. The four – the Honorable Robert Genuario, secretary of the Office of Policy and Management for the state of Connecticut; John Yrchick, Ph.D., executive director of the Connecticut Education Association; Stephen Frayne, senior vice president, health policy, Connecticut Hospital Association and Sharon Langer, senior policy fellow for Connecticut Voices for Children – were focusing on the state's $2.9 billion share of the economic stimulus and the need for close oversight of its spending.

“I want to use our state as a microcosm as we try to figure out how to get the stimulus money [flowing],” said Senator Joseph Lieberman, as he held one of a series of field hearings on the topic.

Grim Picture, but Hopeful Signs

Lieberman painted a grim picture for the state over the last year. Connecticut lost $11 trillion of value, assets and wealth, he said, and from December 2007 to December 2008, the state lost 50,000 jobs. In February 2009, 15,000 jobs disappeared in Connecticut.

The two-year, $787 billion stimulus plan, called “The American Recovery and Reinvestment Act,” was signed into law by President Barack Obama in February, shortly after he took office.

“This is the largest federal appropriation of its kind in American history,” said Lieberman. “The economic situation is unprecedented.”

Lieberman said that spending drives 70% of economic growth and when the economy began to flounder, spending stopped. There are signs of hope, as consumer spending has risen and it was easier for small businesses to obtain loans in March, he said.

“I believe the stimulus package has begun to put money back into the economy, but there's a lot more that we have to do,” said Lieberman.

He outlined three steps that need to be taken:

1. get the money moving to get the economy back on its feet – stop the economic slide

2. invest in the future

3. sustain economic growth – through education, health care and energy in particular.  

Careful Oversight of $2.9 Billion

To make sure the stimulus funds are spent most efficiently, Genuario said Governor Rell created three officer positions, by executive order, to ensure transparency and accountability. As for the impact the funds will have on the Connecticut budget, Genuario said that $1.3 billion of the funds are additional Medicaid reimbursements over the next three years. In addition to the $1.3 billion, $765 million has been obligated for Title 1 education funding, Individuals with Disabilities Education Act funding and the state stabilization fund.

“[The stimulus] has provided the state with needed resources at a time these resources are needed most,” Genuario said.

“It Would Be Undoubtedly Worse Without ARRA's Passage”

John Yrchik, executive director of CEA, applauded Senator Lieberman and Senator Dodd for recognizing the critical role that education plays in the economic recovery. No matter how difficult the situation is now, Yrchik said it “would have been undoubtedly worse without the ARRA's passage,” but he expressed his concern with ARRA being a one-time funding source and questioned what would happen once those funds run out.

“We need a plan,” he said.

The state is set to receive $133 million in IDEA funds over the next two years. This funding will help school districts protect core programming, Yrchik said.

In 2009, the state received $102 million in Title 1 funds. Connecticut will receive an additional $97 million over the next two years.

“It would seem [it is bringing us] closer to reaching No Child Left Behind, but effectively, we're looking at a reduction, because these are unprecedented times and level funding IS a reduction,” Yrchik said. “Can $97 million adequately compensate? Normally, it would help with professional development, after school [programs] and pre-k programs we know work.”

“The challenge is not just a stopgap, but a progression,” said Lieberman. “There's a tendency to put your finger in the dike and stop the water, but maybe you need a new dike,” he said.

For the stimulus money to have maximum impact, it must be spent quickly and effectively. Spent quickly and wisely for education and health, said Sharon Langer of CT Voices for Children.

“Connecticut, our little state, has faced terrible, terrible budget choices,” Langer said. “The federal stimulus has come none too soon to keep its commitment to children and families in our struggling state.”

State of the State of Head Start

A small portion of Head Start stimulus funding had been released the week before the field hearing for quality funding and cost of living increases, Lieberman said. He asked the witnesses how they envisioned the state using Head Start funds to improve early care and education.

“Early care and education has been a significant goal of Governor Rell's,” said Genuario. “[There has been] significant expansion of Head Start and state-funded programs. [The Head Start stimulus funding] is money that will flow through the Department of Social Services to those providers, consistent with that legislation.”

“We've made progress, but we'd like to see more,” said Langer.

“I think several years ago, we made considerable progress,” said Yrchik. But a combination of things have happened to set that progress back, he said.

“It's an enormously important area to increase long-term student achievement,” said Yrchik. “While the state recognizes its importance, we have really been dealt a blow by the economy – there's no getting around that.”

“Your testimony has been very helpful to me,” said Lieberman. “We worked hard to get our fair share of it and it's important that it be used well and effectively.”

The senator added that the natural tendency is to use the stimulus money to survive, but he encouraged a push for it to be used for an investment for the future as well.

“We're off to a good start here in Connecticut,” Lieberman said.

For more information on the American Recovery and Reinvestment Act, visit www.recovery.gov and to read more about the impact the funding will have on Connecticut, visit www.recovery.ct.gov