Plavecsky's Ponderings By Jim Plavecsky
by Jim Plavecsky
July 27th, 2009

Drowning in Stimulus Money

States are drowning in stimulus money to weatherize homes. They have so much money that is mandated by the stimulus bill, that they don’t know what to do with all of it. The amount of federal money earmarked for weatherization of homes is ten times what was originally planned by Congress this year and 20 times what was spent in 2008. In a normal year, the government has programs in place to weatherize about 140,000 homes, but what is currently allocated is enough to upgrade a million homes.But once again, due to the fact that this legislation was rushed through Congress, there are a lot of details missing. There is not a detailed way for states to keep track of the money. According to Leslie Paige, spokeswoman for the Council for Citizens Against Government Waste, the program is susceptible to fraud. The federal government passes the money to states, which in turn pass it to community action agencies. The community agencies are then responsible to pass it to local contactors who will complete the work with the customers in need. There is a lot of passing going on which greatly increases the chances of fraud.

The goal of the program is to help low income families take steps to reduce their home energy expenses whether it involves caulking leaky windows or replacing HVAC systems. According to the Energy Department, more than six million households have benefited from this program since its inception in 1976. Since that time, the average household has saved about $350 per year in reduced energy bills. This number should go up as energy costs increase in the future.

These weatherization programs have now been expanded beyond the poorest families. The level of eligibility has been expanded to include families making up to twice the federal poverty level ($44.1K for a family of four). In addition, the average amount that can be spent has increased to $6,500. It was less than half of that before. People in charge of administering these programs are stunned. They actually feel it will be a challenge to spend this much!

Some states already have a waiting list of qualified clients, but other states don’t currently have such a backlog, and do not even know the best way to get the word out to potential candidates. For example, Cade Gunnels, weatherization coordinator for central Alabama, was quoted as saying, “We are out of clients. We need clients bad!”

Details need to be worked out and worked out quickly to help states spread the news to qualified candidates so that the money earmarked for qualified candidates gets spent within the timeframe encompassed by the legislation and in the proper manner intended.

Take the human body. Our brain sends a stimulus through our central nervous system to muscles in our body which then take action. Likewise, our government’s stimulus, although well intended, will do nothing unless a network is in place to transmit the message to the proper places and action taken to distribute these dollars in the right manner.

Details, details … but that’s what it takes for a stimulus to truly make a difference. If done right, this program can be a very good thing for both the people that it helps as well as the many construction related business that are awarded the work, thereby helping our industry to gain a foothold on the climb to recovery!

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