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Officials: Stimulus going to immediate problems

DES MOINES, Iowa (AP) -- With tax revenue plunging and states struggling to balance their budgets, officials from several states acknowledged Wednesday that they're more focused on immediate problems than long-term issues.

Officials from 10 states gathered in Des Moines to discuss how they were handling billions of dollars from the federal stimulus and hopefully learn what has worked and what hasn't.

For many, the lesson seemed to be that when the economy is troubled, they don't have time to worry about what will happen when the federal funding runs out.

"We're down $1 billion in revenue and it's continuing to fall," said Leslee Fritz, who is heading economic recovery efforts in Michigan, which has been especially hard hit by the slumping economy. "We'll use a lot of the money just treading water."

Other states also have used the federal money primarily to keep their heads above water.

"The way it's being rolled out is stabilizing state budgets," said Mark Cavanaugh, who works out of the Colorado governor's office.

Tom Hanson, a Minnesota budget official, said his state would have faced a financial disaster without the stimulus money.

"The most immediate impact in Minnesota is we would have had a deficit," said Hanson.

Unlike some who have been leery of federal assistance, Hanson said Minnesota officials would fight to get "every scrap we can get."

Besides Michigan, Colorado and Minnesota, officials from Arkansas, Illinois, Iowa, North Dakota, Oklahoma, Washington and Wisconsin attended the daylong meeting sponsored by the Center for State Innovation, based at the University of Wisconsin.

Although many officials said the money helped stabilize budgets, a few were concerned about spending federal money on new programs that could wither when the funding dries up next year.

"We don't have a budget shortfall and 80 percent of the recovery money is going to construction," said Chris Masingill, who coordinates recovery efforts in Arkansas. "We're not going to start any new programs."

Maren Daley, who runs job service efforts in North Dakota, said his state has the nation's lowest unemployment rate and could use more people. Like Arkansas, Daley said North Dakota officials are hesitant to create new programs that a conservative Legislature likely wouldn't fun next year.

"How do you sustain these programs when you know darn well the legislature isn't going to," she said.

Iowa Gov. Chet Culver hosted the meeting, and he said Iowa officials have focused on publicly tracking the spending.

"Governing right now is very challenging," Culver said. "We're focusing on transparency and accountability."

Fritz said Michigan has tried to direct the federal money toward people who are struggling the most. She noted that 20,000 people in Michigan exhaust unemployment benefits every month, and officials are scrambling to meet basic needs.

"We are very focused on the human side," Fritz said.

Kristi Lafleur, who works on economic development out of the Illinois governor's office, said more than 20 state agencies are involved in spreading out the federal stimulus money.

She referred delicately to the political turmoil that has gripped her state. Former Gov. Rod Blagojevich was removed from office and replaced with Lt. Gov. Pat Quinn.

"Illinois has had a lot of challenges," Lafleur said. "We're trying to get our state agencies to work together collaboratively."

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