LOWER POTTSGROVE PA – Tuesday (Feb. 17, 2009) is a big day for President Barack Obama, who during a visit to Denver CO will sign into law a $790 billion economic stimulus package approved by the Democrat-controlled Congress last week and designed to attack the worst economic crisis since the Great Depression.
The bill was opposed by most Republicans in the House and Senate, among them Lower Pottsgrove’s congressman, Rep. Charlie Dent (PA 15th District). Dent described the bill Friday as “unfocused” and “inflated,” and said he doubted it would “restart our economy and assist those who are struggling.”
It will, nonetheless, pump lots of federal money this way. Once in place, what might the package do for residents of Sanatoga, Lower Pottsgrove (PA) Township, and the Pottsgrove School District? An Associated Press (AP) analysis published Saturday said it includes:
Tax breaks that add about $13 a week to the paychecks of millions of Americans, starting around June. In two-income households, like many of those locally, that’s an extra $676 by year’s end. Think of it as almost 23 more bags of groceries at $30 a bag, or another 338 gallons of gas for your car at today’s price of $2 per gallon.
A jump-start for home sales. First-time home buyers who make their purchases by Dec. 1 (2009) would be eligible for an $8,000 tax credit. In Lower Pottsgrove, where in 2007 the median price of a single-family home was $243,982, deducting the credit would be like getting a 3.2-percent discount. In addition, real estate-related work – for brokers and agents, mortgage lenders, appraisers, and others – starts to return. The township and school district benefit too, because each gets a portion of realty transfer tax from the property’s sale.
Tax credits of up to $1,500 for owners improving an existing home with energy-efficient windows, furnaces or air conditioners. Locally, that also could generate more business for retailers like Home Depot and A.D. Moyer Lumber, both located on Armand Hammer Boulevard in the township.
A jump-start for car sales. People who buy a new car before Dec. 31 can deduct the sales taxes they pay from their income tax returns. On a $20,000 car price, that saves about $1,200.
Money to pay for college. “The maximum Pell Grant, which helps the lowest-income students attend college, would increase from $4,731 currently to $5,350 starting July 1,” according to The AP. That would cover three-quarters of the average cost of a four-year public college degree. It’s a fast benefit for the hundreds of students who will graduate this year from Pottsgrove High School, and a slower but sustained benefit for the West (Pottstown) campus of Montgomery County Community College, which attracts a portion of those tuition dollars.
Money for infrastructure. Both Lower Pottsgrove and Limerick townships have high hopes that some portion of the billions of dollars allocated in the package for highway, bridge, sewer and other federal and state projects get invested into fixing current and future traffic problems at the Sanatoga intersection of U.S. Route 422. It’s possible, but not guaranteed, and still a couple of years away.
Money for school districts. “The stimulus sets up a $54 billion fund to help prevent or restore state budget cuts” to education, The AP reported, of which $39 billion must go toward kindergarten through 12th grade and higher education. That’s about $1 billion per state. If all 501 school districts in Pennsylvania were to benefit equally from that money (hint: they won’t), the impact on the Pottsgrove School District would amount to a couple of million dollars. But “this money may go out much more slowly,” according to The AP. “States have five years to spend the dollars.”
There’s also money in the package – billions more – to benefit the poor, pay for police protection, clean the environment, and make health insurance more affordable.
But Americans will pay the piper in the long run, The AP warned. The stimulus plan “will jack up the federal debt … (affecting) us all directly for years, as well as our children and possibly grandchildren, in higher taxes and probably reduced government services. It will also force continued government borrowing, increasingly from China, Japan, Britain, Saudi Arabia and other foreign creditors.”