Doubt cast on stimulus' impact on California jobs

Sacramento BeeNovember 6, 2009 

SACRAMENTO — Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, according to a review of the statistics by the Sacramento Bee.

California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas — and in 44 other states.

In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.

That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars.

"This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."

That certainly was not the way Gov. Arnold Schwarzenegger described it at a news event with Vice President Joe Biden late last week, where he focused on people, not budgets.

"Anyone that criticizes the stimulus money should talk to those 100,000 people that have retained their jobs or gotten jobs because of the stimulus money, especially the 62,000 teachers that have kept their jobs or gotten jobs," Schwarzenegger said.

When asked about CSU's numbers on Wednesday, Camille Anderson, a spokeswoman for the California Recovery Task Force, said it was up to the university to report its numbers accurately.

"CSU assured the California Recovery Task Force that they self-reported in strict adherence with federal reporting requirements," Anderson said.

Multiple cases of inflated and underreported job tallies have surfaced since the federal government released detailed stimulus reports last week, said Craig Jennings, a senior policy analyst at OMB Watch, a Washington, D.C.-based nonprofit group that tracks federal spending.

"I don't think recipients know what they are supposed to put down," Jennings said, referring to guidelines for estimating the number of jobs retained.

Nonetheless, Jennings said his review so far indicates most employers have reported job creation numbers that appear realistic.

Statewide, numbers reported by the Governor's Office show roughly one job in California created for every $75,000 in stimulus funding received through Oct. 30 – a sum that certainly sounds realistic, especially when benefits are considered.

But broken down by projects and programs, that averaging gets complicated.

Many giant projects, most of them dealing with transportation, have received tens of millions of dollars but reported creating or retaining few jobs because work has not yet begun.

On the flip side, about 500 California employers receiving stimulus funds reported creating work for less than $15,000 per job. California State University is the largest example of this – it spent about $10,000 per job. In another example, the state Employment Development Department reported creating the equivalent of about 12,000 jobs for around $7,000 apiece.

Most of those EDD jobs were temporary and went to youths who would otherwise have had trouble finding employment, said Liz Clingman, deputy division chief in the EDD's work force services division.

By comparison, the University of California system received $717 million in stimulus funding – nearly three times the amount given to the CSU system – but reported only about 8,400 jobs saved, a cost of $85,000 per job.

In the case of the CSU system, spokeswoman Potes-Fellow said university officials followed federal reporting guidelines in calculating the numbers.

They determined that CSU's stimulus funds equaled the pay of roughly 26,000 full-time employees for the two months following the allocation, May and June, and reported that as the number of jobs saved, Potes-Fellow said.

Given CSU's large payroll, the system would need to receive another $1 billion or more to keep funding those jobs for an entire year. But about half of the money California expects to receive under the State Fiscal Stabilization Fund – the stimulus dollars funding the university jobs – already has been spent.

CSU's accounting method, however, seems to violate at least the spirit of written guidance from the federal government.

In a June letter to all funding recipients, White House Budget Director Peter Orszag said, "A job retained is an existing position that would not have been continued to be filled were it not for Recovery Act funding."

When asked about CSU's contention that half its work force was not at risk without stimulus funding, a U.S. Department of Education official suggested that CSU might be downplaying the magnitude of its problems.

"If the recipient claims that they wouldn't have lost the jobs if they didn't have stimulus money to pay for them, it begs the question of where they would have found the funds to keep the jobs," said Sandra Abrevaya, the Education Department spokeswoman.

Asked how many jobs actually would have been lost at CSU campuses without the stimulus infusion, Potes-Fellow said she did not know, though she said it would have been significant.

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