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Thursday, July 16, 2009

Stimulus, borrowing and shenanigans

by David Safier
Blog For Arizona

If you read Howard Fischer's article in this morning's Star about Arizona having to borrow $131 million because the feds are holding back stim money, you were probably as confused as I was. It was a "He said, She said, She won't talk" story.

He, Dean Martin, said the fed is stiffing Arizona to get back at Kyl, which will force us to borrow money for schools and pay interest on it we can ill afford.

She, Sandra Abrevaya, spokeswoman for the U.S. Department of Education, said there were concerns Arizona planned to use the money for expenses other than education, which it's not supposed to do.
The other She, the Accidental Guv, isn't talking. She won't take sides. If I'm reading the tea leaves right, Brewer's unwillingness to take a side probably means Martin is trying to score political points and cover his fellow Rs' posteriors at the same time for what is probably a problem within the state, not with the Feds.

Here's an outsider's angle from Education Week, which doesn't need to maintain a pretense at objectivity by treating both sides as if their arguments have equal merit.

The most interesting thing, to me, is how this all started. Turns out, there's a fraud and accountability alert built into the stimulus reporting system that's akin to credit card fraud protection (which often results in a call from your credit card company when a funny charge appears to be going through). Arizona officials, within the last several days, attempted to draw down from their $681 million stimulus allocation more than $400 million—which is an unusually high amount, especially in a state that hadn't drawn down a single dollar of stimulus money so far, says ED's Sandra Abrevaya. That unusually high amount triggered some sort of alert to ED officials, who called Arizona officials to ask what they were using that money for.

Turns out, ED officials say, Arizona wasn't planning to use it for education purposes, as promised in its application and as required by the stimulus law. Instead, state officials planned to use the money to plug general budget holes.


Sounds like Arizona was trying to pull a fast one and the Feds caught them at it. Was this a way for the Rs to pay a few bills while they keep trying to pass some kind of budget? ("Mom, dad, I promise, the money will only go to pay for my tuition. Not a penny will go to my bookies or to pay for next Friday's kegger.") It looks to me like the Feds are trying to keep Arizona honest.