NYC Letter: Innovations In Government, No.2

Day 52 of CHOPE

The American people are watching. They need this plan to work. And they expect to see their money spent in its intended purpose. That's why we've created Recovery-dot-gov. A Website that every American can go online to see how their money is spent and hold their Federal, state, and local officials to the high standards that they [scil., the American people] expect.

President Obama,
exhorting the responsible dispensation
of the $787B in stimulus spending
WASHINGTON February 23, 2009 (MSNBC)

We visited Recovery-dot-gov where we found this:

• Recovery funds are used for authorized purposes and every step is taken to prevent instances of fraud, waste, error, and abuse;

• Programs meet specific goals and targets, and contribute to improved performance on broad economic indicators.

Recently we were sent this.

CITIES SELLING STIMULUS MONEY

March 9, 2009 (PSN) - A few area cities have found an alternate way to use their federal stimulus money: selling it to other cities for cash.

Metropolitan Transportation Authority has allocated a minimum of $500,000 in federal stimulus funds to each of the 88 cities in the county for transportation-related projects. Unincorporated areas will benefit, too.

Several smaller cities, some without shovel-ready projects, are making deals with others to sell or swap such funds and replenish their general funds. City manager Shauna Clark of La Habra Heights:

The best way to see this is as a huge windfall for us because we do have the flexibility of using the general fund money now.

The city of Bradbury, with a population of roughly 1,000, is working on a deal to sell its $500,000 share of federal funding doled out by the MTA to the city of Torrance for $315,000 in cash for its general fund, according to Torrance officials. ... La Habra Heights, a city of 6,000, has sold its $500,000 in federal funds to the city of Westlake Village for $310,000 cash. Irwindale, population 1,500, also sold its $500,000 to Westlake Village, for $325,000 cash. ... The city of Rolling Hills, population 1,900, sold its $500,000 share to the city of Rancho Palos Verdes for $305,000 cash. The city of Avalon has reached an agreement to swap its $500,000 with L.A. County.

The MTA's authorization of such swaps amounts to a "cash giveaway out the back door," said Doug Johnson of the Rose Institute:

The MTA pleads they have no money for transportation projects, and now they're just giving cash away and letting the cities auction it off to each other regardless of priority or project or what. I'm just stunned and appalled.

[Hat tip: Duncan]

The recovery site for California is "not yet available" at Recovery-dot-gov where "every American can go online to see how their money is spent". [Pause.] Oh, surprise.

One thing is certainly clear, use of stimulus money was never intended to create a secondary market in credit-for-cash swaps. We would also argue that swaps for cash to replenish a general fund -- where expenditures are at the discretion of the local authorities -- puts those monies beyond any intended or authorized purposes of the stimulus bill. Lastly, stimulus monies were never meant to be windfalls -- monies beyond the recipient's spending to "contribute to improved performance on broad economic indicators".

The MTA in dispensing uniform $500,000 grants irrespective of community size or need or project specifics and without direct spending superintendence confounds Mr. Obama's pledges of accountability and transparency.

If a locality wants to boost its general fund, tax the locals. [Pause.] See how they like it.

CHOPE.

No project. No oversight. Your money.