Stimulus money misses the valley

SACRAMENTO -- Few places in California need more economic help than the San Joaquin Valley, where jobless rates hover near 20 percent. Yet as the government hands out federal stimulus money, the valley is falling behind more prosperous regions, officials say.

On a per capita basis, the valley is seventh among nine regions in stimulus investments -- behind such places as San Diego and the Bay Area, according to a review of state data by the California Partnership for the San Joaquin Valley, an economic task force.

Frustrations reached a boiling point recently, when the valley was mostly shut out of stimulus grants for housing and energy programs.

"The valley appears once again to be overlooked by many state and federal programs as it struggles to address deep-rooted and complex challenges that have stifled the region's progress for dec- ades," Mike Dozier, lead executive of the California Partnership for the San Joaquin Valley, recently wrote in a sharply worded letter to state and federal lawmakers.

The partnership was created by Gov. Schwarzenegger several years ago to cure the region's economic ills.

His administration, ironically, is responsible for overseeing portions of the stimulus spending that the partnership is now complaining about.

Still, "we're not upset with the governor at all," Dozier said. "We just want to make sure that they don't forget us."

The $787 billion federal stimulus program -- targeted at getting people back to work -- would seem ideally suited for the eight-county region, where the average jobless rate is 18 percent.

Funds not for long-term ills

But economists noted that the stimulus was designed to lift regions from the recession, not solve the chronic unemployment that exists in the valley even in good times.

"The recession itself hasn't necessarily hit harder here than other places," said Jeff Michael, an economist at the University of the Pacific in Stockton.

And when measured against recession job losses, stimulus spending in the valley is about average. The stimulus figures come from the latest information on a state Web site, which does not include certain safety net program spending. The Sacramento region ranks first, but spending there is somewhat inflated because it includes some funds routed through state government.

Funds are distributed by federal and state agencies. The Schwarzenegger administration says according to its figures, the valley is getting an equitable share of the money sent from Sacramento.

"For Recovery Act funds that flow through state entities, the San Joaquin Valley region ranks above the statewide average in its per capita share," administration spokes-man Eric Alborg said in an e-mail statement.

Valley officials say they are not seeking a panacea, just fairness.

Dozier said he had been generally pleased with the stimulus spending -- until recently, when the region was mostly overlooked for the housing and energy grants.

The California Energy Commission in late February awarded $110 million in stimulus money for energy efficiency, including upgrades such as better insulation and heating and cooling systems. Big awards were given to the Bay Area, Sacramento and Los Angeles, but several large valley applications were rejected.

Valley officials still are seeking an explanation. It could be that other regions had a leg up because they have more sophisticated grant writers, speculated Paul Johnson, executive director of the San Joaquin Valley Clean Energy Organization, a nonprofit that advocates for more clean energy investments in the region.

"We're making progress and we're clearly better," he said. But "we're not at a point where we could compete with other parts of the state."

Foreclosure help slight

Valley officials also cite federal grants aimed at rehabbing abandoned homes. Despite having some of the highest foreclosure rates in the nation, the region got only $25 million of $318 million given to California -- all of it for Modesto.

Finally, leaders are upset about being shut out of a new state program that designates special "iHUB" innovation zones, which could give regions an advantage luring grants.

Valley counties sought the special status to grow industries including water technology, agribusiness and health care. Winning cities include Palm Springs, Livermore and San Francisco.

Eloisa Klementich, a deputy secretary in the state Business Transportation and Housing Agency, did not detail why the valley was ignored, but said applications were reviewed by an independent committee that included officials from NASA, the University of California and venture capitalists.

"We believe it was a very fair process," she said.

On the Net:

The state tracks stimulus spending at stimulusmap.shtml.