RALEIGH — The $787 billion federal stimulus law is not yet three months old and by government standards is distributing funds at warp speed, at least to North Carolina.

Advertisement

The state already has spent $550 million and earmarked another $350 million of the estimated $6.2 billion it expects to receive from the package through late 2011, according to state officials coordinating the stimulus money.

Another $466 million in road projects will be obligated by June 30, and more than $86 million in water system projects also are getting started.

“I intend for our state to not only be prepared to use this money to put our people back to work, but also to spend the money with the utmost accountability and transparency,” Gov. Beverly Perdue said.

The breakneck pace has startled members of the General Assembly into assembling separate committees in recent weeks to understand the unprecedented undertaking in North Carolina, and perhaps get their two cents in.

“It’s like 10,000 points of light, and there’s never been anything like it anywhere close,” said Sen. Martin Nesbitt, D-Buncombe, chairman of the Senate Select Committee on Economic Recovery. “It’s just so huge that it’s hard to get your arms around it.”

Nesbitt’s committee and a similar House panel want the state to tap into the most money it can while providing another layer of oversight.

“We’re looking at the pots of money, seeing how we can incorporate those into the budget and what we need to do to appropriate them,” said Rep. Joe Tolson, D-Edgecombe, the chairman of the House recovery panel. “We’ll see how this money can be used to fill some of the cuts that we have to make.”

But it’s been difficult. Meetings have been sporadic because they’ve often been held after late-afternoon floor sessions — a difficult time to collect lawmakers for a quorum.

Lawmakers also learned that money can be taken away as quickly as it arrives. Senate committee members learned last week they will have $400 million less in recovery funds at their disposal as they draw up a new two-year spending plan because Perdue plans to use the funds now to narrow the current $3.2 billion shortfall.

When the committees do meet, they’ve learned how complicated the stimulus package is.

The state will receive money in more than 50 categories alone, each with their own rules on how cash can be spent and reporting requirements to Washington. The items don’t count tens of billions of dollars in the form of individual tax breaks and competitive nationwide grants for items such as medical record modernization and installing broadband in underserved areas.

The Perdue administration has taken the lead on the stimulus before she took office in January, lobbying President Barack Obama and Congress to get more money for Medicaid expenses and transportation.

She also assembled the 15-employee N.C. Office of Economic Recovery and Investment, charged with managing the state’s share of the stimulus, and picked former Health and Human Services Secretary Dempsey Benton to lead it.

He knows a thing about dealing with the strings attached to federal money. The complex Medicaid program run by Benton’s old department spent more than $10 billion annually alone, when federal and local funds were added.

But Benton said using the money is challenging because the regulations for distributing it are slowly moving out to the states.

“Part of the challenge is to meet several different management targets that we’re expected to meet,” Benton said in an interview, but still “it’s moving pretty well given the magnitude of this program.”

For example, North Carolina is expected to receive $45 million a year to weatherize as many as 10,000 homes by installing insulation, closing air leaks and repairing heating units.

But the amount has some lawmakers worried since the weatherization program, housed in the Department of Administration, receives around $10 million annually and uses community-action groups and nonprofits to work on 3,000 housing units.

That’s probably going to require outside for-profit contractors to perform the work, which raises the risk for abuse and rip-offs, Tolson said. Preventing nefarious activity is even more important given that federal accountants chose North Carolina as one of 16 states to examine closely how stimulus money is spent.

State government needs to make sure reputable people across the state do the work, Tolson said. “I have asked local people to make sure they do a good job of watching this money.”

Lawmakers believe they will take a more active role with the stimulus as they write up their state budget.

During a Senate recovery meeting last week, bill-drafting division director Gerry Cohen suggested that the General Assembly pass legislation for stimulus money that passes through the state’s coffers. That could give lawmakers the opportunity for additional oversight.

“We’ve got to look at all these programs and make sure that we’re satisfied that it will pass the smell test and the accountability test,” Nesbitt said.