Mayors complain about stimulus spending

President Obama is facing complaints from big-city mayors and county politicians that parts of the economic stimulus package are shortchanging their constituents.

Vice President Joe Biden has been holding private conference calls on the stimulus with elected officials from around the country, some of whom have been telling him that metropolitan regions are losing out to rural areas in the competition for stimulus money.

That argument tracks a report released by the U.S. Conference of Mayors that concluded that cities have gotten a disproportionately small share of stimulus money set aside for road and other transportation improvements.

Harry Montoya, a commissioner in Santa Fe County, N.M., took part in a phone call with Biden earlier in the month and said he told the vice president that “the dollars are not trickling down to the local county governments regarding spending for projects that we have that are shovel-ready: road, water and wastewater projects.”

Seattle Mayor Greg Nickels, newly installed president of the U.S. Conference of Mayors, gave a speech to the association on June 15 saying he would ask his fellow mayors to “critically review every aspect” of the $787-billion stimulus package.

“In an effort to jump-start the economy, the federal government relied on old formulas that left behind our metropolitan areas,” said Nickels, a Democrat. “That was a mistake.”

The mayors commissioned a report looking at a pot of $18 billion set aside for transportation. When the report was released this month, the 85 most populous metropolitan areas had received $8.8 billion -- or 48% of the total. Yet those same areas account for 63% of the U.S. population and 73% of the gross domestic product, the report said.

Chicago would need to get another $250 million in stimulus transportation funds to reach a level that reflects its contribution to the Illinois economy, the report calculated. In Ohio, Cleveland and Cincinnati account for 40% of the total economy yet received less than 5% of the transportation stimulus funds earmarked for the state.

Mayors contend the stimulus relies too heavily on long-standing government formulas that make states the primary conduit for the cash. Once the money is funneled to states, governors and legislatures dole it out disproportionately to rural areas that have amassed political clout, mayors say.

“Funding went directly to states,” said Denver Mayor John Hickenlooper, a Democrat. “And many, many states have a bias toward funding rural projects. That has to do with the political makeup of state legislatures and governors.”

Steve Ellis, vice president of the group Taxpayers for Common Sense, said that “across the board, the stimulus is not a smart program. Essentially, we’re shoveling cash out, using the same old shovels we’ve had in the past. It doesn’t surprise me that some urban communities that may have a greater need are disadvantaged simply because the playing field is tilted toward benefiting more states and the largest number of congressional districts.”

Asked about the mayors’ study, a senior White House official cautioned against placing too much focus on any one slice of stimulus.

“It’s a fallacy to look at only one program,” said Edward DeSeve, special advisor to the president. “That represents about $18 billion of a $787-billion program. And although it’s an important project, it certainly isn’t a large one -- not the predominant program along the way.”

Stimulus money is flowing into cities in the form of healthcare benefits, tax relief and other programs not reflected in the mayors’ report, he said.

The complaints come as surveys show that much of the public is skeptical about the stimulus package, which President Obama had made his top legislative priority when taking office this year.

A poll released by the Wall Street Journal last week showed that 39% considered the stimulus a “bad idea,” compared to 37% who thought the opposite. More broadly, 58% of those who responded said the president and Congress needed to make deficit reduction a priority, an implicit criticism of the stimulus.

The White House is aggressively making the case that the program is necessary. Cabinet secretaries have been crisscrossing the country touting the stimulus’ merits. And Biden, through regular conference calls with elected officials, is attempting to allay concerns from the grass roots.

Some mayors believe the Obama administration’s repeated calls for accountability have had a chilling effect.

Because the administration has warned “that if you’re doing something wrong we’re going to call you out on that, people are being very cautious about dotting the I’s and crossing the Ts,” said Durham, N.C., Mayor Bill Bell, a Democrat.

On a conference call with elected officials Friday, Biden fielded a complaint about stimulus money flowing to states rather than to cities. Some of the local elected officials on the call said Biden seemed to take their side. But DeSeve, who also was on the call, said the vice president was merely trying to show empathy.

With the economy in a slump, some lawmakers believe a second stimulus is necessary. If Congress were to take up a second stimulus, mayors said they would press hard for new rules routing money straight to cities.

Los Angeles Mayor Antonio Villaraigosa said he was satisfied with the transportation dollars the city has received. He said he increased Los Angeles’ share by lobbying state officials.

If a second bill comes around, however, the mayor said he wanted some changes.

“The money should have been distributed more proportionately,” Villaraigosa said, “based on population and congestion.”

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peter.nicholas@latimes.com