Local businesses and consumers speculated Thursday about how the $789 billion economic stimulus recovery package might help Manatee County.
From health providers to non-profits and school administrators, all are cautiously hoping that funds reach here to create new jobs and reboot the economy.
n AUTO INDUSTRY: The relief proposed in the economic stimulus plan for the automobile industry is garnering cautious support from Manatee County dealerships.
The stimulus has two major incentives for consumers: a tax incentive for the purchase of plug-in hybrid vehicles, and making the sales tax on new car purchases tax-deductible.
“What it means for the automobile business, itself, is just tremendous,” said Jim Russell, general manager of Firkins Nissan in Bradenton. “We’re one of the businesses that are probably hurting the most, and the automobile business has a large effect on everyone.”
Russell, like a few other local car dealers, is more in favor of the $2.5 billion the federal government is proposing to make available for sales tax write-offs on new car purchases.
“If you’re a buyer and you’re paying sales tax on a $30,000 vehicle, that’s an $1,800 tax write-off next year,” Russell said.
Plug-in hybrids, Russell says, have been a tough sell for other car dealers now that gasoline is back down to $2 a gallon.
“The price of gasoline is what’s ruining the effect of plug-in hybrids,” Russell said. “When gas is below $2 a gallon, nobody wants to buy hybrids. When it’s over $2, everybody’s considering them. “
Mike Fulford, a sales manager for Red Hoagland Pontiac-GMC, agrees the hybrid credit may not be much of an incentive.
“Right now, I don’t really see that being a helpful effort right now, due to the fact, whether it be imported or domestic brand, neither is selling right now,” Fulford said. “Our truck sales have jumped 50 to 60 percent now that gas is under $2 a gallon. I think the sales tax incentive on new cars is going to be more helpful.”
At Bob Boast Dodge-Volkswagen, General Manager Todd Lee said a $1,300 tax credit incentive on hybrid Jettas has gained interest.
“That’s helped us sell a couple, it doesn’t make or break the deal for some,” Lee said.
The sales tax write-off, Lee said, would make consumers more open-minded about the purchase of a new car.
“I think it will just create more showroom traffic,” Lee said. “That would be a big help to open the door to the thought of a purchase.”
Aid to poor, unemployed
Should Congress pass the compromise stimulus bill, the Manatee Community Action Agency could receive $3 million over the next two years to help weatherize modest-income homes, said Barbara Patten, executive director.
The bill includes $5 billion for weatherization programs nationwide.
“The weatherization program is the big-ticket item,” Patten said. “We have been told to expect handling up to 13 times the volume of homes that we normally handle.”
The influx of money means new jobs.
“We have been told to ramp up and have the vendors available for work,” Patten said. “That means jobs for electricians, plumbers, dry wall installers and other contractors who will be needed to help weatherize homes. It will be a win-win situation for everyone.”
Patten also expects the action agency to receive some of the $1 billion allocated for community service block grants.
“We can use that money to expand self-sufficiency programs to help poor families,” she said.
Manatee County Head Start also will likely get some of the $2 billion set aside for the pre-school program for poor children, but Patten was unsure how the money would trickle down to the local level.
“Head Start has been on and off the table during the stimulus debate,” she said. “We really don’t know how it will break down.”
At the Suncoast Workforce Board, spokeswoman Sally Hill said it is too early to tell what the $4 billion for job training could mean for Manatee and Sarasota counties.
For the 2008-09 budget, the Suncoast Workforce Board received $46,000 for job training to spend on tuition, books, uniforms and tools, depending on the area of study.
The materials go toward job training courses provided at Jobs Etc. to help employed workers improve their skills so companies can remain competitive in the local market.
“We would always like more (money) and considering the economic climate, we certainly could use more money,” Hill said. “More and more people are finding their skills are no longer current and could use the training.”
Dr. Aaron Sudbury, president of the Manatee County Medical Society, was pleased to hear the stimulus bill sets aside $21 billion to provide a 60 percent subsidy of health care insurance premiums for the unemployed under the COBRA program.
“We have had patients lose their insurance because they are unemployed and cannot afford to pay $500 to $700 for COBRA payments,” said Sudbury. “It would be wonderful if Congress can help those unemployed people keep their insurance.”
The COBRA subsidy would also help hospitals struggling with a rising number of uninsured patients, said Sudbury.
But Sudbury worries that $19 billion set aside to modernize health information technology systems could actually reduce the number of physicians in Manatee County. He predicts that many doctors near retirement will choose to close their practices rather than spend up to $140,000 to set up the computerized record system.
“For a young practice, it makes sense to make that investment as soon as possible,” Sudbury said. “But for someone in practice for say 20 years, it forces them to make a huge investment when their reimbursement is in decline. Imagine the expense of having to convert 20 years of paper charts scanned in, especially when they are close to retirement.”
He is concerned that this system will be set up to penalize those who don’t comply.
“That may be the final straw to force them to retire, and we can’t afford to lose doctors in this area,” Sudbury said.
Should policy makers decide to move to a national database, Sudbury said, practices like his own may have to invest in an entirely new system to be in compliance.
Instead, Sudbury would like to see the money invested in infrastructure that would allow a myriad of record-keeping software programs to speak to one another.
“There are no standard communications between programs,” said Sudbury, whose practice Premier OB/GYN Associates has made the conversion to electronic record-keeping. “Every time we want to interface we have to pay money to have those systems communicate. We really need investment in software infrastructure to help integrate all of these systems.”
The stimulus package would set aside $47 billion for state fiscal relief to prevent cuts in state aid to school districts, with flexibility to use the funds for school construction and repair.
About $25 billion would be distributed to school districts to fund special education and the No Child Left Behind law for students in K-12; $17 billion to boost the maximum Pell Grant by $500 to $5,350; and $2 billion for Head Start.
The portions for special education and for schools with high numbers of low-income students required to meet No Child standards remain fairly intact through both House and Senate discussions, said Jim Drake, Manatee schools’ assistant superintendent of finances.
That would at least pump thousands of dollars into Manatee schools, he said.
“Not having seen the particulars of the bill, it is hard for me to make a statement that has meaning to it,” he said. “The money may be out there, but I don’t know what strings are attached to it yet.”
There are also no estimates on how much each state will receive, he said.
Judy Laurent, Manatee school’s associate director of federal program and grants, said the boost to schools with low-income students would be helpful, even if it goes away in two years.
There’s no guarantee the district will receive the same amount of funding for federal programs in schools, she said. The stimulus will help increase the schools her department serves.
“As the stimulus insists, we would hire people and purchase equipment and materials that we have not been able to purchase,” she said.
The Manatee Education Association vows to continue lobbying Florida legislators to let school districts decide how their portions of the stimulus would be spent if it passes.
“Money from Washington should help offset any shortfalls to the education budget,” said Pat Barber, president of MEA. “We will continue to work with state leaders to make sure that the money is used in a way to offset any damage caused to education in this slowing economy.”
Herald staff writers Grace Gagliano, Sylvia Lim, Carl Mario Nudi and Donna Wright contributed to this report.