It has been reported that Binghamton, NY has just received $320,933 for a new 49.68 kilowatt solar energy system. This will be installed to the city’s water filtration plant. It is part of the $47 million in recovery funds allocated to Broome County according to Rep. Hinchey, as stated at Pressconnects.com. Rep. Hinchey stated at the event,
The question that should be asked is, how much green? As in how much money will the new effort create for the hard hit Binghamton area?
Looking at the numbers according to Recover.org, the site created by the Government to account for the Obama Stimulus funds use, a total of 3 jobs are estimated by the White House Council of Economic Advisors to be created from this project. That same site quotes the savings from the new solar green project at $9,205 per year (whereas the news article states $7,500).
Thus the project will pay off the Stimulus funds used in 34.9 years (42.8 years according to the news article).
But what about the jobs? There are 3 jobs stated to be created. It is not stated if those jobs will be full or part-time, but the presumption is full time work. Assuming that the jobs create 3 jobs at $30,000 ($4,335 or 17% over the median income in 2000) per year it will take 3.5 years to equal the funds from the Stimulus. But let’s figure that jobs and savings combined. It’s a total of $99,205 per year, and results in a total equal to the Stimulus funds in 3.24 years.
Of course there is one figure missing to all of this. Interest. Assuming a modest 3% interest rate (far better than any bank will give at the moment) that means that by Year 3 the total cost of the Stimulus funds will be $350,692.12. So the actual payoff is 3.53 years according to the White House, including savings.
Thus it will take nearly 4 years for this project to have a positive net impact. And it assumes that the pay exceeds the median income from 10 years ago, during a time currently when the unemployment rate is roughly estimated at between 9.3% – 9.7% (unemployment in March 2000 was 4.1%).
Look at it another way. There are between 45,000 and 47,000 estimated people in Binghamton. The savings is equivalent to about $0.20 per person per year, in the best case scenario.
According to Recovery.org, there is $20.6 million in spending that is defined, allocated and/or set for Broome county, including the above. That’s half of the number stated by Rep. Hinchey, but it does not include several bids and programs with no current allocations of funds. That money will create 235 jobs. Which equates to $87,660 spent per job created. Further we assume that each job pays $30,000 (above the median). Which results in a loss of $57,660 per job created. This would affect the unemployment rate of Binghamton by .005% (even though the jobs will not all be in Binghamton and using the best case scenario of population).
Therefore the question is if this truely is helping the Binghamton area? The numbers sound great when quoted, but does this provide a savings to the public? Does it create enough jobs to affect the unemployment rate? Does it create enough jobs to stimulate the economy, or further the push for green jobs? In fact does it do anything besides look good for Rep. Hinchey, who happens to be up for re-election?
Another question is if Binghamton, New York is a representative slice of America outside major cities, and the Stimulus funds are similar in allocation and purpose, is this benefiting anyone besides perhaps politicians up for re-election?