Although President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law in Denver, Colo. only a week ago, the stimulus funding will begin trickling to Durham soon.
North Carolina is to receive $6.1 billion of the $787 billion economic stimulus package in the coming days. And while state and local officials have welcomed the money, they are cautious and pragmatic in their expectations of its effects on the local economy.
"You never have enough money, but I'm comfortable that if we are aggressive the community will be okay," said Durham Mayor Bill Bell, who visited the White House last Friday with a group of mayors to discuss job creation with the Obama administration.
Of the $6.1 billion that North Carolina is to receive, $838 million will be spent on transportation, including increased public transportation in the Triangle area. Another $2 billion will be allocated to schools to avert cutbacks and layoffs. Finally, $2 billion will be spent on dealing with the state budget deficit.
The estimate from the Obama administration economists is that the money to North Carolina will create 100,000 jobs, said Michael Walden, Neal Reynolds distinguished professor of economics at North Carolina State University.
The Durham economy has not seen some of the devastating consequences of the economic crisis that neighboring cities and communities have been experiencing, Bell said. Durham has the top "AAA" debt rating, allowing the city to borrow at the lowest interest rates available, and its major industries are rooted in stable sectors of the economy, such as health care. Bell pointed to the help that Duke and other institutions have afforded to the local community, especially through stable employment.
He noted, however, that Durham has not been immune from the economic downturn. Other local officials have made it clear that urgent action is needed to help the local economy.
"I have been on the City Council for 26 years and I have never seen a situation comparable to what we are experiencing," said City Council member Howard Clement.
The Durham community is starting to see tangible effects of the halting economy. A 3 percent budget cut for the Durham Public School system was approved Jan. 26 due to declining revenue from sales tax, investment earnings and register deeds.
Despite the historic size of the stimulus bill, many experts caution people from expecting a recovery in the coming months.
"[The stimulus bill] is designed to contain some of the damage," Walden said. "We will continue to suffer however it will be better than it would have been without it."
Walden explained that the bill has three main components. The first part of the stimulus bill will allow for additional spending, focusing on infrastructure and energy. Additionally, a $400 tax credit will be given to all working adults. Finally, money will be given to states to help with welfare and education programs.
The stimulus money comes to the state of North Carolina in a time of fiscal uncertainty. State Controller David McCoy announced Feb. 23 that the state's tax revenues have fallen by $286 million, or 14.3 percent, since last year, and Gov. Bev Perdue predicted that the state is likely to take on a $2.2 billion budget deficit before the fiscal year ends, according to the Associated Press.
While the partisan debate over the stimulus has lead many Republican governors to say that they will not accept the money, the Perdue administration has been eagerly awaiting the additional funds.
At a White House press conference Feb. 23, Perdue responded to South Carolina Gov. Mark Sanford's statement that he would refuse to accept money from the stimulus package.
"I am not a real good driver. But I will take a pickup truck to South Carolina and be glad to take any of the money that Mark Sanford and the people of South Carolina don't want."
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