PSN Works with State Legislators and advocates in supporting effective legislative campaigns to promote policy change state by state Read more about how PSN can support you

Federal Funding for State Innovation

Implementing the Recovery Plan: A Resource Guide for State Legislators and Advocates

Share

_Recognizing the severity of the economic crisis our nation faces, President Obama this week signed the landmark American Recovery and Reinvestment Act, a plan aimed at "restoring or saving" 3.5 million jobs and investing in the long-term future of the American economy.  

Built into the plan is a recognition that, while the federal government will assist in funding the work, the implementation of the plan will rest mostly with the states.  This Dispatch provides facts, guidance and a collection of resources to state leaders and advocates on how to implement the recovery plan in a strategic manner that strengthens our states and honors our progressive values.

The resources highlighted in this Dispatch will be archived and updated at http://www.progressivestates.org/stimulus .  Please email additional resources that we can include to stimulus@progressivestates.org.

 

Table of Contents

Overview - Summaries and Key Resources

Transparency Requirements for States

Education

Health Care:

Clean Energy and Transportation Investments

Broadband Provisions

Unemployment and Training Programs:

Expanded Safety Net Support 

Criminal Justice Funding

Overview - Summaries and Key Resources

A summary from the House Speaker's Office provides a good overall breakdown of dollars invested in various areas, from education to clean energy to transit; while this detailed line item analysis identifies funding for many individual programs.  The White House has provided detailed Job Creation Estimates by Congressional District (along with the graphic below) and the Center for American Progress has produced these Interactive Maps of the geographic distribution of funds.  

The Council on State Governments has created StateRecovery.org to identify opportunities for states to get federal assistance and track programs and efforts to implement the recovery plan in each state.  The National Conference of State Legislators (NCSL) has a summary (Part I and Part II) on the extent of legislative authority over Recovery Funds.

With unemployment, foreclosures and poverty rising across the country, the Center for Budget and Policy Priorities (CBPP) and Center for Law and Social Policy (CLASP) both highlight how the recovery plan will help low-income individuals and families.  This fiscal help will lessen the painful budget cuts on the table, although it won't close all the budget holes in most states.

Rep. Jim Moran's office has produced a recovery plan implementation memo that emphasizes How the new Recovery Package Benefits Nonprofits (create link), which notes, along with general information, that the Community Development Block Grants (CDBG) program has $50 million is set aside specifically for a new program to strengthen nonprofits.

Conference Call on Progressive Strategies for Implementing the Stimulus Plan
On Thursday, February 26, 2009 at 4:00pm EST Progressive States Network brought together progressive state legislators and policy experts from across the country to answer questions and share practical strategies for obtaining federal stimulus funds and using them to shore up budget gaps, restoring ailing economies, and effecting lasting progressive change.
Listen to a recording of the call:

Transparency Requirements for States

Federal Requirements for Transparency:  President Obama has promised "full transparency and accountability" for the recovery plan, launching a new website - Recovery.Gov - which promises to publicly track all funds distributed.  As this analysis by OMB Watch explains, all recipients of funds, including state governments, will be required to file regular reports on each project funded: its progress; the number of jobs created or retained; and detailed information on all subcontractors or sub-grants. The federal Office of Management and Budget has already issued guidelines to agencies on the reporting requirements that will be enforced on recipients.

Implementing Transparency at the States: These federal requirements reflect public demands that money spent be carefully tracked; one recent poll showed that 76% of American voters said creating state level websites to track funds was "important" to public accountability. A broad-based national coalition, the Coalition for an Accountable Recovery, is supporting full disclosure at both federal and state levels.  State governments will need to adopt far greater transparency and public tracking for their own spending than they have ever done in the past.  

A broad coalition of groups have signed onto these Principles for State Implementation of ARRA, which emphasize directing funds to benefit those hurt most by the recession and assuring that funds are spent in an open and accountable manner.   A broad coalition in New York, the Stimulus Oversight Working Group, has released Common Principles for Transparency and Accountability that emphasizes removing lobbyist influence over distribution of federal funds, setting up standards in distributing funds to individuals and communities where the impact will be most effective, and a transparent system for tracking all details of companies and organizations receiving stimulus funds.

A good Stateline article highlights the challenges states are facing in meeting the transparency requirements for the recovery plan, especially the need to collect more data on job creation by state and local government contractors. 

Some governors are already creating new accountability commissions and websites, but states should be considering legislation; such as Oregon's proposed HB 2037 requiring all state agencies to collect detailed information on contracts, jobs created, wages paid, and costs by each contractor, while making the data publicly available on the Internet.

Tracking the Recovery Plan:  ProPublica has created a new site, Eye on the Stimulus, to track developments in the recovery package around the country.  The organization is also working with the morning news program The Takeaway and WNYC in creating Shovel Watch, a project to combine investigative reporting and public comments to help monitor recovery money from "bills to building."

Education

Overall, the recovery plan devotes $139.24 billion to education funding.  One large portion of that funding is a State Fiscal Stabilization Fund of $53.6 billion to help state and local governments avert budget cuts - $8.8 billion of which can be used for non-educational programs, plus $39.5 billion in educational block grants allocated by student and general population measures, and $5 billion for incentive grants and other purposes. Other education funding includes $24.8 billion for School Construction Bonds, plus $11.3 billion for special education, $10 billion for Local Educational Agencies, and $3 billion for School Improvement Grants.

Most higher education funding - approximately $30 billion - will be distributed directly to students and their families, but the recovery plan includes an estimated $15 billion for scientific research, much of which will go to universities.  Additionally, funding provisions for the National Institutes of Health includes $1.5 billion set aside for university research facilities.

Health Care

The recovery plan dedicates more than $145 billion to investments and reform of our broken health care system, including extending aid for states to bolster Medicaid, subsidizing COBRA health care for the unemployed, and investments in Health Information Technology (HIT) to improve care and cut costs.  Beyond the recovery plan, states will also be implementing the recently enacted expansion of SCHIP coverage.

Medicaid Support: The Recovery Act will send $87 billion to states in the form of increases to the federal medical assistance percentage, or FMAP, applying to Medicaid expenses between October 1, 2008, and December 31, 2010.  As Families USA explains in a great FAQ, to be eligible for the Medicaid stimulus states must maintain income eligibility levels that were in place as of July 1, 2008 and cannot institute additional barriers to enrolling or keeping Medicaid for eligible populations. States have until July 1 of this year to rollback any changes that would make them non-compliant with these provisions. The new FMAP calculation includes an across-the-board 6.2% increase and a "hold-harmless" clause delaying or canceling previously scheduled decreases in a state's federal match.  Additionally, states with higher unemployment rates will receive additional FMAP increases.

Health Care for the Unemployed:  The recovery plan provides $25 billion to help laid-off workers afford their previous employer's health care offering via COBRA. The federal government will pay 65% of COBRA premiums for 9 months after a job is involuntarily terminated for the period from September 1, 2008, to December 31, 2009.  Additionally, to be eligible for the subsidy, individuals must earn less than $125,000 and families must earn less $250,000.

For all laid-off workers to qualify, states need to make sure they have mini-COBRA, or "continuation of coverage", laws applying to firms with fewer than 20 employees and offering the coverage for a period of at least 9 months. The federal-COBRA law includes only firms with 20 or more employees.  A new Families USA report provides state-by-state recommendations for immediate action that legislators should take to ensure that unemployed workers in their state are eligible for the full COBRA subsidy.   According to Families USA, the following states (AL, AK, AZ, DE, ID, IN, MI, MT, PA, VA, WA) may not have a mini-COBRA law and should enact continuation of coverage legislation for micro-firms immediately.  Elsewhere, the following states (AR, DC, GA, HI, KS, NM, OH, OR, SC, UT, NE, OK, TX, VT) need to amend their existing mini-COBRA laws to increase eligibility to 9 months in order to take full advantage of the federal subsidy.  The Academy Health/ RWJF's State Coverage Initiatives project has released How States Can Build on New Federal Legislation that Subsidizes COBRA Coverage for Laid-off Workers to enact or extend mini-COBRA laws and add additional subsidies for health care for workers facing layoffs. 


SCHIP expansion and inclusion of immigrant children and pregnant women:  Separate from the American Recovery and Reinvestment Act, the recent expansion of the state children's health insurance programs (SCHIP) increased federal eligibility for children to 300% of the poverty level.  The new law also removes the five year waiting period that legal immigrant children and pregnant women faced in receiving access to coverage and increases funding for state outreach efforts to enroll more children. The twenty-five states including DC already providing some form of coverage for immigrant children or pregnant women will now receive increased federal funding through higher FMAP rates for existing services if they opt to do so by notifying the Centers for Medicaid & Medicare services of a change in their plans, while others will have to adopt administrative changes or legislation to expand coverage for legal immigrant children and pregnant mothers.  However, states can provisionally adopt Immigrant Childrens' Health Improvement Act (ICHIA) as of April 1 and then seek legislation, if necessary, later in the legislative session.

Health Information Technology:   The recovery legislation includes approximately $19 billion for Health Information Technology (HIT) aimed at purchasing HIT for hospitals and clinics and rewarding doctors for using the technology. A majority of the HIT funding, $17.2 billion, is to provide Medicare and Medicaid payment incentives to certain doctors and hospitals that are “meaningful” users of electronic health records.  The bill also codifies and provides $2 billion in additional financing for, the Office of the National Coordinator for Health Information Technology (ONC). 

Specifically, on January 1, 2010, grants will be made available to states and Indian tribes to establish “Loan Funds. ” These "Loan Funds" are aimed at helping providers conduct activities such as purchasing certified electronic health record technology and training personnel.  Beginning in FY11, grants will be available to states or state-designated entities to carry out initiatives that are aligned with goals such as assisting patients with using health IT and achieving nationwide exchange of health information.

Clean Energy and Transportation Investments

Estimates on potential green energy investments in the recovery package, including upgrading our transportation infrastructure, range from $70.6 billion to $113.5 billion depending on what is included, but the bottom-line is that this package is the largest investment in energy independence in American history.  The Apollo Alliance has created a new resource, Recovery Act Information Center: What You Need To Know, with summary of key provisions and resources for funding of green economy initiatives, and has a broader report, written with the Workforce Alliance and the Center on Wisconsin Strategy (COWS), on best practices for implementing green energy programs.

Green for All and Policy Link have created a User's Guide to 2009 Recovery Act Funds.  It outlines what's in the law to help promote an inclusive green economy, the funding streams available, recommendations for equitable implementation by state and local leaders, and program-specific "hooks" to help advocates move policy in that direction.  Green for All also has an  Economic Recovery Package resources page

State Energy Conservation Programs:  Key funding streams for states in the recovery plan include:

  • $5 billion for the Weatherization Assistance Program to help low-income families reduce their energy costs by weatherizing their homes and to make our country more energy efficient.
  • $3.2 billion to the Energy Efficiency and Conservation Block Grant Program to assist local governments in implementing energy efficiency and conservation programs.  
  • $3.1 billion to the State Energy Program which provides grants and funding to state energy offices for energy efficiency and renewable energy programs.
  • $2.5 billion for energy efficiency and renewable energy research, development, demonstration and deployment.
  • $500 million to prepare workers for careers in energy efficiency and renewable energy fields.

One other opportunity is to effectively use education building funds to assure that public schools are green and sustainable:

Upgrading the Electrical Grid:  The recovery plan also contains $11 billion for smart grid technology aimed at improving the energy efficiency of electrical grids around the country, including $100 million for smart-grid related worker training.  While written from a heavily corporate perspective, this report from DOE's Electricity Advisory Committee does raise some important regulatory issues states will face as smart grid technology is implemented around the country.

Transportation and Infrastructure Investments:  The recovery plan is a key "down payment on a new transportation vision," in the words of the coalition Transportation for America, including $27.5 billion allocated to the traditional highway program, $8.4 billion for public transportation, $9.3 billion for intercity and high-speed passenger rail, and $825 million for projects that will make our streets safer for walking and biking. Significantly, the law includes unprecedented flexibility in using “highway” funds on ports, transit, passenger and freight rail, or other projects as national, state or regional needs may require.  

The American Public Transportation Association produced this webinar for transit systems on how to prepare to receive funds from the bill, while Reconnecting America outlines best practices on using funding to promote transit-oriented development.

Broadband Provisions

The recovery plan allocates $7.2 billion to promote high-speed Internet programs.  Funding will be used to increase broadband access in rural, unserved and under-served areas, to support programs that encourage broadband adoption in low-income communities, for initiatives that expand public community centers' capacity and for the development of a national broadband map.  The majority of the funds, $4.35 billion, will be distributed by the National Telecommunications and Information Administration (NTIA)  through the Broadband Technology Opportunities Program as grants to states, municipalities, non-profits or private companies.  NTIA must attempt to provide at least one grant to each state and fund projects which can be substantially completed in two years and which adhere to the Federal Communications Commission's Internet nondiscrimination and openness principles. Additional grants will be dispensed through the Rural Utility Service (RUS) for telehealth, distance learning and rural broadband initiatives.  For more specific information regarding broadband stimulus funding see Progressive States Network's own Guide to Broadband Provisions in the American Recovery and Reinvestment Act.

The National Telecommunications and Information Administration (NTIA) announced that beginning March 2, 2009, it will hold meetings with interested parties in connection with broadband grant programs described in the ARRA and the Broadband Data Services Improvement Act. Meetings will be held at NTIA headquarters and will continue until further notice.  To schedule a meeting, contact Barbara Brown at (202) 482-4374 or bbrown@ntia.doc.gov.

In order to ensure that state are thinking strategically about broadband initiatives and leveraging broadband applications to create efficiencies and economic savings as well as get the most out of stimulus money and any future funds that may be distributed by the federal government, states should establish Broadband Strategy Councils.  See Progressive States Network's Guiding Principles for Broadband Strategy Councils for details about broadband strategy councils.   See also Opportunities for Federal Grants, Loans and Other Support for Broadband Projects by the Baller Herbst Law Group)

Unemployment and Training Programs

The recovery plan includes critical funding and new programs to help the unemployed and invest in training programs on top of the health care help for the unemployed discussed above.

Extended and Expanded Benefits: An estimated 17.9 million Americans will receive a $25/week increase in their UI benefits, and the temporary emergency federal benefits program will continue through the end of December, helping an additional 3.1 million unemployed.  The first $2,400 of unemployment benefits per recipient are also now exempted from federal income tax.  There is also a new "Extended Benefits" State Option for high unemployment states to provide an extra 13 to 20 weeks of jobless benefits even after the Federal Emergency Benefits Extension lapses.

Modernizing Unemployment Insurance Systems: $7 billion is provided in incentive payments to states that have implemented Unemployment Insurance Modernization provisions that expand access to benefits for low-income workers, part-time workers and workers who leave jobs for compelling family reasons. The National Employment Law Project (NELP) provides a guide to what provisions each state needs to implement in order to access the funding, as well as model language for implementing the needed changes.

Training Funds:  $3.95 billion is provided for the Workforce Investment Act (WIA) to fund job training and employment services.  $2.95 billion will be distributed to states using standard WIA formulas, with $1.2 billion for youth activities, $1.25 billion for dislocated workers, and $500 million for adult activities.  It also provides $50 million for YouthBuild, $750 million for a new competitive grant program for worker training and placement in high growth and emerging industries, and $200 million for the dislocated workers assistance national reserve.

The Workforce Alliance has released a summary of legislative language a detailed analysis of training and workforce development provisions of the ARRA.  They also have a summary of the Trade Adjustment Assistance for Communities provisions within  the ARRA. 

Expanded Safety Net Support

The Recovery Plan also dedicates significant funds for states to help those in or near poverty suffering the most during the downturn, including increased aid for families, nutrition programs, child care support, and housing aid -- all with the goal of giving them individual support on the path to personal recovery.

TANF Funding:  A new $5 billion TANF Emergency Contingency Fund covers 80% of the cost of increased assistance payments in states with caseload increases, as well as 80% of additional spending on short‐term non‐recurring benefits and subsidized employment. No state may receive (over two years) more than 50% of its annual block grant from this and the existing contingency fund. The Act also temporarily removes a disincentive to allow families to receive assistance created by the caseload reduction credit, extends the TANF Supplemental Grants for FY 2010, and allows states to use unspent TANF funds from previous years for benefits allowable under TANF.  Despite some immediate conservative attacks, these provisions do not reverse the 1996 welfare law.

Nutrition Programs: An additional $20 billion temporarily increases benefits under the Supplemental Nutrition Assistance Program (SNAP), formerly called Food Stamps, by 13.6 percent. The Act also lifts restrictions on how long unemployed individuals without children can receive benefits. $500 million is added for the Women, Infant, and Children (WIC) nutrition program, $150 million for the Emergency Food Assistance Program, and $100 million for equipment grants for the school lunch program.

Child Care and Support:  $2 billion in new discretionary funding is provided under the Child Care and Development Block Grant (CCDBG), with no state match or maintenance of effort required (see here for a state-by-state breakdown).  $255 million of these funds are allocated for quality improvement.  $2.1 billion is invested in Head Start ($1 billion) and Early Head Start ($1.1 billion).  Conference language emphasizes that tribal, migrant and seasonal programs are to be included in the distribution of Early Head Start funds.

Federal incentive matching funds for child support enforcement (see state-by-state funding) are restored through September 30, 2010. The provision would temporarily reverse a 20% cut to federal child support program funds made by the Deficit Reduction Act of 2005.

Affordable and Emergency Housing:  While most federal housing funds, including in the Recovery Plan, go overwhelmingly to wealthier homeowners, the recovery plan does include some significant increased housing aid for low-income Americans, as outlined by the National Low Income Housing Coalition.  This includes:

  • $1.5 billion for homeless prevention and rapid re-housing, including rental assistance, housing relocation, housing search support, credit repair and other stabilization assistance.
  • $4 billion for the Public Housing Capital Fund. Of this, $3 billion will be distributed by the capital fund formula and $1 billion will be distributed by competitive grants for ‘priority investments’ to leverage private sector funding for renovations and energy conservation.
  • $2.25 billion for Project-based Housing, including $2 billion for Section 8 assistance. $250 million is for HUD to provide grants and loans to upgrade its project-based stock to increase energy efficiency.
  • $2 billion to fund the Neighborhood Stabilization Program to redevelop foreclosed and abandoned homes through a competitive process.  No NSP funds can be used to demolish public housing. 
  • $2.25 billion for capital investments in low income housing tax credit projects to be distributed to state housing tax credit allocating agencies through competitive awards.  A provision allows agencies to distribute a portion of tax credits as grants. 
  • $1 billion for the Community Development Block Grant program.
  • Additional funds including $100 million for HUD’s lead hazard control and healthy homes program and $510 million in Native American Housing Block Grants.

For resources see:

Criminal Justice Funding

The recovery plan includes $4 billion for criminal justice programs.  Most of the funds go to the Dept. of Justice's two primary funding streams for state and local law enforcement - Byrne grants ($2 billion) and the COPS Program ($1 billion).  Both are formula grants, but an additional $225 million has been included for competitive Byrne grants as well.  While Byrne funds cover a very wide variety of criminal justice expenses and programs, the lack of oversight has led to calls for critical reforms of state programs.

Additional funding, administered by the DOJ, is also available in the following specific areas: Violence Against Women Prevention and Prosecution Programs ($225 million); assistance to Indian Tribes ($225 million); and assistance to rural law enforcement ($125 million), crime victims programs ($100 million), funds to fight Internet crimes against children ($50 million), and funds to address drug crime along the Southern border ($40 million).

Some State-by-State Recovery Plan Analyses

The Oklahoma Policy Institute has a new budget brief from Oklahoma Policy Institute that provides detailed analysis of the federal legislation, Oklahoma's share, and details and conditions on how the funds may be spent.

Posted: February 19, 2009 - 11:14am by PSN
Add a Resource - have a link to suggest?
Fill out the form and hit 'Submit' to add a new resource. All submissions go through an approval process.

CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Incorrect please try again
Enter the words above: Enter the numbers you hear:
Get another CAPTCHA
Get an audio CAPTCHA
Get an image CAPTCHA
Help

Core Analysis

In The News

more

Fact Sheets

Eye On The Right

Resource Organizations