MinnEcon: August 3, 2009 Archive
Where are all those transportation stimulus jobs?
Posted at 3:28 PM on August 3, 2009
by Paul Tosto
(0 Comments)
Filed under: Economic stimulus, Jobs & unemployment
Transportation was the place where I really expected to see a clear line drawn between the federal stimulus money and thousands of new jobs. But the Minnesota job numbers aren't coming close to what was predicted.
Two paragraphs from MPR reporter Mark Zdechlik's story today on stimulus transportation projects lay it out:
Until recently, MNDOT has been saying that for every $1 million spent, as many as 27 jobs could be directly and indirectly created. But those projections were based on what MnDOT says were old Federal Highway Administration figures.
MnDOT now says the jobs numbers could be less than half that; a total of 5,400 jobs rather than 13,500.
Yikes. When did that happen? I was still working from the upbeat projections leaders were using just after the bill passed.
Back in February Gov. Tim Pawlenty was touting Federal Highway Administration numbers saying Minnesota would get 5,000 jobs just from the first 60 greater Minnesota projects.
But, yeah, the most recent data from MNDOT show only 2,130 jobs so far connected to the stimulus:
Mn/DOT ARRA project status (as of June 30)
| Total Number of Projects (State and Local) | 210 | |
| Projects put out to bid | 98 | |
| Projects under contract | 54 | $162,594,178 |
| Projects underway | 36 | $112,415,896 |
| Projects complete | 4 | $1,374,463 |
| Jobs directly related to projects (employees of contractor, sub-contractors and consultants.) | 2,130 |
Maybe it's coming. Or maybe, as we saw on Friday with St. Cloud's New Flyer bus company, we have to seriously rethink just how much benefit the stimulus bill will deliver.
When we asked people in our Public Insight Network about their expectations, most of the 40 who responded expected some benefit but did not think the stimulus would help tremendously. (Note: add your voice here.) Several worried that the debt the country was taking on was not worth the benefit the spending would deliver.
Back in April, Brent Olson, one of our Network sources who's also a commissioner in Big Stone County in western Minnesota, told us he thought one stimulus project -- $7 million to resurface Big Stone Highway 75 -- would have a positive effect.
Without the stimulus money, I doubt if Highway 75 would have been resurfaced for many years to come... So, a badly needed infrastructure improvement will be done, a great deal of local gravel, etc, will be purchased, and we'll sell some meals and hotel beds for a couple months - all good things.
We're trying to check in with Olson today and will post any updates.
But as we look back on the stimulus, its pros and cons, we may end up discovering that the Big Stone 75 experience matched the reality elsewhere: Some roadwork got done, some local merchants benefited. But the stimulus came up short on jobs created and jobs sustained.
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Check out the map below to read what people in our Network are telling us about the job climate around them. Then share your story.
A bad debt, a family home lost in small town Minnesota
Posted at 3:30 PM on August 3, 2009
by Paul Tosto
(0 Comments)
Filed under: Housing & mortgages, Saving & spending
Margie Hoyt is losing a home that's been in her family for generations because of a loan she says should never have been made.
A source in our Public Insight Network who lost her job in April, Hoyt told us Thursday she has 30 days to vacate her home inMadelia and then another two weeks to get her stuff out, including the major appliances.
Hoyt, who served on Madelia's planning commission and is now a city councilwoman, wanted to tell her story to let others know the collateral damage of a bad debt. She's about to pay a price in this recession for a financial mess not of her own making.
Here's what she told us:
Hoyt, 50, cared for her father for two years at the family home in until a few months before his death in December 2007.
The house, in her family since 1926, should have been debt free, except in 2003, she says, her 84-year-old father agreed to a 15-year, $20,000 loan for siding. Two years later her father refinanced for $26,000 and 30 years.
She knows her father showed poor judgment, but said lenders should have known better, too, given her father's age and finances.
The final hit came, she says, when the homeowners insurance lapsed. To get it re-insured, she said, an inspection was required, which found problems with the roof. What was a $160.09 monthly payment jumped to $500.
Her father, she adds, had no life insurance and his estate is insolvent:
Because an 84 year old man was approved for a $20,000, 15 year mortgage, I now face being evicted from a home his sister lived in and with whom I spent several summers with as a child during the 1960s.
I came to live in this house with my dad in 1993 and had a daughter while living here and going to school in 1996. My daughter is the 4th generation to live in this house.
Given my financial situation and trying to get back on my feet after my dad passed away I couldn't afford a lawyer to help with the probate or negotiating with the lender on the mortgage.
The job I had (night shift auditor at a local motel) only paid $7.25 with no benefits so it's not like I can get a loan.
About 1 of 83 Minnesota homes is in the foreclosure process, according to a recent estimate, with a big jump in pre-foreclosure notices in Minnesota during June.
So even as the economy bottoms out, these problems aren't going way soon.
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Hoyt's story got us thinking about all the fallout from the recession and mortgage crisis. Many people messed up their personal finances and are paying for it now.
But what about those who did the right thing and still got sideswiped?
Use this form and tell us how you're dealing with a personal financial problem that you didn't cause.
Below check out stories people in our Public Insight Network are telling us about the housing market where they live.
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