2009 GRA Annual Policy Conference July 27, 2009 Marcia Howard mhoward@ffis.org

1. ARRA, the Federal Budget and the States 2009 GRA Annual Policy Conference July 27, 2009 Marcia Howard mhoward@ffis.org Federal Funds Information for States www.ffis.org

2. Components of ARRA Federal Funds Information for States www.ffis.org • Cost of enacted legislation = $787 billion • Major Components: • Formula aid to state and local governments (~ $250 billion) • Aid to individuals through WIC, SNAP, extended UI, etc. • Tax breaks and bond provisions • Competitive grants to further administration priorities in areas of green jobs, technology (HIT, broadband), R&D

3. State Allocations for Selected Formula Programs ($ in thousands) Federal Funds Information for States www.ffis.org

4. ARRA Funding as a % of State General Fund Spending, FYs 09 - 11 Federal Funds Information for States www.ffis.org

5. Formula Aid to State & Local Governments in ARRA Federal Funds Information for States www.ffis.org

6. Budget Support (Flexible Spending) Federal Funds Information for States www.ffis.org • Increase in Medicaid matching rate (FMAP) ~ $82 billion • All states are held harmless at their FY 2008 FMAP levels for FYs 2009, 2010 and the first quarter of 2011. • All states receive a 6.2 percentage-point increase in their FMAPs. • States receive a bonus FMAP addition depending on how much their unemployment rates have increased over a base level. • Medicaid MOE eligibility provisions apply. • First two provisions apply to Foster Care and Adoption.

7. Budget Support (Flexible Spending) Federal Funds Information for States www.ffis.org • State Fiscal Stabilization Fund • General Government Purposes ~ $8.8 billion • Cannot use funds for casinos, aquariums, zoos, golf courses or swimming pools; restoring or supplementing a “rainy day” fund; paying down past debt; financial assistance to students to attend private schools • Education Stabilization Fund ~ $40 billion • Advancing Education Reforms • MOE Requirements • Use of Funds

8. Capital Spending Federal Funds Information for States www.ffis.org • Capital Funding – Smaller share than anticipated • Transportation ~ $47 billion • State Certifications • Highways – 50% of funds obligated by 6/30/2009 • Transit – 50% of funds obligated by 9/1/2009 • Education • School construction; modernization, renovation or repair

9. Bond Provisions Federal Funds Information for States www.ffis.org • Build America Bonds (New) - capital • Tax Credits and Direct Payments , Economic Development ($10 billion cap) • Education • Qualified Zone Academy Bonds (repairing facility, providing equipment, developing course materials, and training teachers) ~ $1.4 billion cap • Qualified School Construction (new) ~ $11 billion cap • Energy • Qualified Energy Conservation ~ $3.2 billion cap • Clean Renewable Energy Bonds ~ $2.4 billion cap

10. Too Much Too Soon? Federal Funds Information for States www.ffis.org • Can states spend this much money quickly? • Are targeted programs staffing up? • Does capacity exist to make rapid capital investments of this magnitude? • Can local school districts manage the infusion of federal funding?

11. Too Little Too Late? Federal Funds Information for States www.ffis.org • What happens in FY 2011 and beyond? • Balancing the state budget • Downsizing an upsized staff • Aid to local governments, schools

12. Other Challenges Federal Funds Information for States www.ffis.org ARRA Reporting Requirements Administrative Costs Matching/MOE Requirements Information Management Measuring Success Increased Federal Oversight