WASHINGTON -- After 32 years tuning, repairing and selling pianos, Dan Skelley wanted to branch out. All he needed was $20,000 to become a Washington distributor for a Chinese piano company, one of the largest manufacturers in the world.
But as the worst economic downturn since the Great Depression deepened and credit dried up, two banks balked at loaning him the money. Finally, a third bank helped him secure a Small Business Administration loan backed by funding from the $787 billion stimulus bill approved by Congress and signed by President Obama in 2009.
Skelley's story is far from unique as small- and medium-sized business owners across the state have used stimulus money to renovate, expand and even open businesses at a time when other credit has been hard to come by.
Recipients include an Italian restaurant and a chiropractic clinic in Bellingham, a well-known burger joint in Tacoma, a hydroponic gardening store in the Olympia area and a pizza parlor and hair salon in the Tri-Cities.
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Most of the attention with stimulus funding, which since has been adjusted to $862 billion according to the Congressional Budget Office, has focused on major infrastructure projects and everything from schools to health care and green energy projects. But Skelley and tens of thousands like him have been mostly overlooked as they use economic recovery funding to create or save one or two jobs at a time.
Skelley doesn't have a staff at his low-profile store in a business park in University Place. But he hires piano movers and tuners as he markets Ritmuller Pianos, built in the world's largest piano factory in Guangzhou, China, using a German design, German components and wood from North America.
"I'm a little guy, but I'm like everyone else," Skelley said. "I want to make money. It's a good opportunity."
Sam Tino received a $34,500 SBA stimulus loan to remodel two 1950s-era bathrooms in his Mambo Italiano Cafe in Bellingham. It took several carpenters and a tile layer nearly a month to finish the job.
"They were glad to get the work," Tino said.
New Edge Inc., an innovation strategy firm in Richland that works with Fortune 500 companies, used more than $700,000 in SBA stimulus support to purchase the building it was in. The company ended up saving money and has added several people to its 20-person staff.
"I love new roads, but putting money into them is a one-time thing," said Pam Henderson, the company's co-CEO. "I think more stimulus should go to small- and medium-sized companies. That's where the organic growth is."
State gets billions
Washington state governments, nonprofits and businesses are expected to receive $6.6 billion in federal stimulus funding by way of grants, loans and contracts. So far about a third of that has been spent, said Arun Raha, who as executive director of the Washington Office of the Economic and Revenue Forecast Council, tracks economic trends in the state.
Through June, that money had created or saved an estimated 14,000 jobs in Washington, Raha said, adding that could increase to 70,000 to 75,000 jobs by the time the money runs out.
The state's unemployment rate has edged down from 9.4 percent in the first quarter of this year to 8.9 percent, he said. "Without the stimulus it would have been higher," he added.
With the political season heating up, stimulus funding has become a hot topic. Republicans criticize it as a waste of money that substantially added to the federal debt. Democrats say the funding was the only way to get the economy moving again after a crash they blame on Republican policies.
It may be years, if ever, before economists decide how effective stimulus spending was.
Raha's post is nonpartisan, and he declines to get dragged into the political fray. But he said, "The fact stimulus is needed in a recession is not in dispute. The type of stimulus can be in dispute."
The debate is over whether efforts to stimulate the economy should involve direct spending or tax cuts, he said.
In the short term, Raha said, stimulus funding needs to continue, but in the mid-term of four or five years out Congress needs to develop a "credible" deficit reduction program.
As for SBA loans, Raha said they are "very important. What's holding back job creation is credit availability. Every little bit helps."
Hanford adds 2,900 jobs
Nearly a third, about $2 billion, of the stimulus funding the state will receive is targeted for cleaning up the Hanford nuclear reservation where waste from years of plutonium production is stored.
Stimulus funding has created 2,900 jobs there so far, many of them union and professional jobs with an average salary of $65,570, the federal Energy Department said.
Of the five top companies in the state that have received stimulus funding, four of them are Hanford related and the other is the state Department of Transportation.
And the 4th Congressional District where Hanford is located has received more stimulus dollars than any other in the state while the nearby 5th Congressional District ranks No. 5.
Lawmakers representing both those districts, Republican Reps. Doc Hastings and Cathy McMorris Rodgers, voted against the stimulus funding despite the $2 billion for Hanford. Hastings has said he was concerned the administration would use the one-time stimulus funding to justify cutting Hanford's annual cleanup budget.
One of those who got one of the new Hanford jobs is Ty Rose, 26, who led a Marine platoon in Iraq before returning home and leaving the Corps in 2008 as the economy was sliding.
"I thought with leadership experience it wouldn't be hard to find a job," he said. "I was wrong."
After months of looking, he finally landed a job with CH2M Hill, a Hanford contractor that has received substantial stimulus funding. Now Rose and his wife live in the Tri-Cities.
"We are putting people back to work at jobs that have to be done," Rose said. "It's hard to listen to critics who say the money has gone to waste."
Stimulus funding has allowed SBA to make 69,700 loans worth $29.4 billion, said SBA spokesman Mike Stamler. The agency's weekly average lending has increased 90 percent since Congress approved the stimulus funding.
"While commercial lending trailed off, we were one of the few sources of credit for small businesses," Stamler said.
In Olympia, Gulf War veteran Tony Kantas said he and his partner would never have been able to open Northwest Hydroponics without a $49,000 SBA loan.
"I didn't even know it was stimulus money," he said. "But it is definitely a good thing."
Many of those who have received the funding say the political criticism is misguided. "It's reactionary," Skelley said. "People need to look at the numbers."
Along with the SBA loans, some of the stimulus funding has helped companies indirectly.
Pexco operates a plastic extrusion plant in Tacoma, making things like plastic posts that help channel traffic. In the summer, the Tacoma plant with 120 to 125 employees was running four shifts a day, 24/7.
By November, the company had cut its work force by 15 percent and was running three shifts only four days a week, said Peter Speer, the plant's vice president for sales.
But as stimulus funding for highway projects began to kick in, Pexco's plant began to hum. By March of this year, the company was operating five days a week and in April it started hiring.
"We were cranking," Speer said. "There is no question that for companies like ours the stimulus has been a boost."