Neediest areas not always first for stimulus

updated 3:54 p.m. ET July 17, 2009

SABINAL, Texas - Under the Obama administration's economic stimulus plan, needy communities were supposed to be first in line for money to rebuild highways and jump-start the economy.

It hasn't worked out that way.

The rules required that states give priority to counties considered "economically distressed." Yet less than half the federal highway money announced so far is directed toward those high-unemployment, low-income areas, according to an Associated Press analysis of more than $16 billion in spending announced by the U.S. Transportation Department.

What was supposed to be a way to steer money to hard-hit areas has turned into a coin flip: 53 percent of the money is going to counties that don't meet the federal standard of economically distressed areas. Those are places where lasting unemployment is higher than the national average or where income is significantly lower than the rest of the country.

"If economically distressed areas get the money, it's just by coincidence," said Democratic state Rep. Jim Dunnam, chairman of a committee overseeing Texas' use of stimulus money.

Just days after Obama signed the law, Texas transportation officials testified before Dunnam's committee that economic conditions were not a factor in their selection process. Since then, more than 200 Texas projects have started receiving almost $1.2 billion in federal stimulus money. Just 44 percent has gone to counties considered economically distressed.

"You do want to lean in on areas that need that help," White House press secretary Robert Gibbs told the AP.

But Gibbs played down the significance of steering money to economically distressed counties, saying workers there could drive to jobs in neighboring counties.

Several Texas counties hardest hit by the economic meltdown weren't in line to get any stimulus money at all under plans approved by the Transportation Department in Washington.

In rural Terrell County, roads take a daily beating from oilfield drilling and service traffic. But in the isolated West Texas county, where oilfield layoffs are cutting into the bone, roads aren't on the list to get any financial aid from the stimulus plan.

"I'd love to have some of it," said Leo Smith, a county judge. With resignation in his voice, Smith acknowledged that population centers such as Dallas and Houston are usually first in the running for any kind of aid.

"Your rural, unpopulated areas that are producing all the oil and gas for people in cities to drive your cars ... we need to be taken care of, too," he said.

The analysis of economically distressed areas tests one of the requirements of the stimulus plan: that needy areas get preferential treatment.

The results vary wildly from state to state. In Louisiana, 7 percent of the money announced so far is going to economically distressed areas. In neighboring Mississippi, it's 86 percent.

In some states, particularly in rural ones such as Wyoming and Kansas, steering money to economically distressed areas would mean shifting it away from population centers. Two-thirds of the nation's counties qualify as economically distressed, but only about one-third of the population lives there.

A report submitted to Congress this month found that because states needed to choose projects quickly, many either didn't consider distressed areas until late in the planning process or used their own criteria rather than the federal requirements.

The report from the Government Accountability Office found that "officials from most states considered project readiness, including the three-year completion requirement, when making project selections and only later identified to what extent these projects fulfilled the economically distressed area requirement."

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