Wednesday, July 7, 2010
Governor Ed Rendell came to Pittsburgh Wednesday to sign legislation that will allow the state to borrow up to $600 million for capital projects. The bill authorizes projects for funding through the Redevelopment Assistance Capital Program, or RACP, and includes funding for the redevelopment of the Connelley VoTech Center into a green jobs incubator, a UPMC sponsored effort to build a bio-defense center, and an incubator in Johnstown that will carry the late Congressman John Murtha’s name. Roughly half of the funds have already been allocated to specific projects but the rest remains to be earmarked. The state legislature will send the governor a list of projects for his consideration this fall and he will chose from among them at that time. “They run a bill [that will] probably have a billion dollars in projects for only $300 million in spending and the governor has to choose from those,” says Rendell.
Rendell has come under fire for spending the capital dollars at a time when the state is cutting its operating budget spending. He argues the money is needed to spur economic development. “When the economy is still struggling, that is the time to invest money, creating not only the construction job, but creating manufacturing jobs,” says Rendell. The governor says the materials used in the projects will be produced in Pennsylvania and put more Pennsylvanians to work.
The RACP money is not sent immediately to the projects. The project manager must submit bills to the state and at the same time show that the state funds are being matched at least dollar for dollar. Rendell says, “We usually get three, for five times return on our investment.” The Governor estimates the spending will put 18,000 people to work, doing construction and producing building materials. Rendell says this is a god way to move state money into the economy because the funds go to projects that are ready to begin work. He also notes that the state’s bonding status is good right now. “In the capital program our debt is less than one quarter of our authorized limit,” says Rendell, “we just sold a state bond issue on Wall Street two months ago at 3.1% which is the lowest interest rate we have been charged in the history of the Commonwealth.”