ARRA, Stimulus Act Jan 20th 2009 estimates
ARRA, Stimulus Act Jan 20th 2009 estimates
Maine's DAFS Commissioner Low’s Update on the American Recovery and Reinvestment Act
February 21st, 2009 ·
Maine’s – Update on the American Recovery and Reinvestment Act
Commissioner Ryan Low of the Department of Administrative and Financial Services and the State Coordinator for the American Recovery and Reinvestment Act of 2009 presented the following information to the Joint Standing Committee on Appropriations and Financial Affairs on Feb. 20, 2009.
AUGUSTA – During an update before the Joint Committee on Appropriations and Financial Affairs, Commissioner Low presented an overview of the major program areas contained in the federal stimulus law. He also discussed tax provisions that were included in the legislation.
Low began his presentation by cautioning that many of the dollar amounts that have been reported concerning the federal legislation remain uncertain.
His presentation also covered areas of accountability and reporting requirements.
Under Section 1607 of the Recovery Act, within 45 days of enactment, GovernorBaldacci must certify that the State will request and use funds provided in this act and that the funds will be used to create jobs, avoid layoffs and promote economic growth.
For each project or expenditure, the Governor also must certify that the investment has received a full review and vetting required by the law and is an appropriate use of tax dollars under the law’s stipulations.
The certification must include a description of the investment and the total cost of the project. The certification must be posted online. No later than 10 days after each quarter in which funds are received, the Governor must submit a report that contains: total dollars received, the amount expended or obligated to date, and a detailed list of each project.
The project list must include the name of the project, a description, a status update, the number of jobs created or retained, a justification for the project, a detailed list of subcontractors or sub-grants and contact information for the project manager.
Commissioner Low also discussed the importance of providing appropriate financial oversight of the new federal dollars flowing into Maine, including the reassignment of current budget/audit positions to monitor stimulus spending and the possibility that additional staff might be needed.
Richard Thompson, the State’s Chief Information Officer, briefed the Committee on the current Web site and planned upgrades that will debut next week.
The overview covers major policy areas, but it is not all inclusive of the programs that will receive funding through the federal stimulus law. The numbers listed are each program are national and are not Maine specific.
Preliminary Estimate of Allocation (FFIS, 2/18/09)
General Purpose (Flex) $8.8b
Numbers do not reflect any allocation from state incentive grant program
State Fiscal Stabilization Fund provides grants to governors to prevent cuts to key services, including K-12 and higher education, distributed via existing state and federal formulas and flexible funds for public safety and other government services, which may include education, education modernization, repair and renovation. The Act also includes $5 billion in incentive grant monies which will be awarded to states that make key performance measures.
Preliminary Estimate of Allocation (GAO) Including adjustment for high unemployment $82.7b
The Act provides an enhanced federal matching rate for Medicaid payments made during the time period spanning October 1, 2008, through December 31, 2010. All states will receive an increase in their base FMAP rate of 6.2 percentage points. States experiencing significant changes in unemployment will be eligible for an additional FMAP increase for the period January 1, 2009, through June 30, 2010. Based on preliminary data from the Maine DOL, it appears that Maine will qualify for the lowest tier FMAP adjustment for the high unemployment match rate.
It has been widely reported that Maine could received $470 million in funding through this section of the law. This figure is based on a national average growth rate. Because Maine’s rate of spending on Medicaid has been below the national average, the increased funding is expected to be substantially less, perhaps in the $270 million to $320 million range.
Enhanced FMAP does not apply to SCHIP or DSH payments. There is a separate adjustment for Medicaid DSH allotment, which will have a temporary 2.5% increase in FFY 2009 and 2010.
The Act also includes a new moratorium through June 30, 2009, to the final regulation regarding Medicaid outpatient hospital facility services. Similarly, the Act extends the current moratoria through June 30, 2009 on the optional targeted case managed services, transportation services and provider taxes.
Highways & Bridges
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $26.8b
Does not include any monies states might receive through competitive discretionary grants made by the Secretary
Funds are distributed to states using a federally prescribed formula. Monies are to be apportioned within 21 days of date of enactment. States are required to set aside 3% of their apportionment for transportation enhancement projects; 30% of a state’s apportionment must be allocated within the state according to the Surface Transportation Program formula. The first 50% of a state’s apportioned funds must be obligated within 120 days of apportionment; the other 50% must be obligated within one year of apportionment. If a state fails to meet these requirements, their unobligated funds will be redistributed to other states.
Transit Capital Grants –
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $6.7b
Funds received from the Federal Transit Administration support locally planned and operated public mass transit systems by issuing grants for planning, vehicle purchases, facility construction and related purposes. The FTA administers this assistance according to its authorizing legislation, known as SAFETEA-LU.
A portion of the recovery funds under this provision will be distributed by the Secretary in the form of discretionary grants to public transit agencies for capital investments that will assist in the reduction of energy consumption or greenhouse gas emissions of their fleets.
At least 50% of recovery monies distributed in the form of transit capital grants must be obligated within 180 days of apportionment; the balance of the monies must be obligated within one year of apportionment, or the state will lose the funding.
Drinking Water State Revolving Fund (drinking water infrastructure)
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $1.97b
Clean Water StateRevolving Fund (upgrades of wastewater treatment systems)
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $3.93b
These recovery monies will be distributed through the federal Environmental Protection Agency. States are required to obligate monies within 12 months of the date of enactment; otherwise they will be redistributed to other states. Priority funding is to be given to projects on a state’s priority list that can be under construction within 12 months of enactment. States are required to use at least one-half of the funds for grants, negative interest loans or principal forgiveness. At least 20% must be used for green infrastructure, water and/or energy efficiency, innovative water quality improvements, decentralized wastewater treatment, storm water runoff mitigation and water conservation. States are prohibited from using these recovery funds for the purchase of land or easements, or to buy, refinance or restructure debt instruments executed on or after October 1, 2008.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $5b
These recovery monies are intended to assist low income families meet their energy costs by weatherizing their homes. The Act will increase the number of people eligible for assistance by expanding the income threshold from 150% of poverty level to 200% of poverty and will increase the limit on total assistance from $2,500 to $6,500.
State Energy Programs
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $3.1b
These monies will be allocated to states in accordance with current federal formulas. In order to access these monies, the Governor must provide assurance to the federal government that: the state regulatory authority will seek to implement with each utility a general policy that ensures utility financial incentives are aligned properly to assist consumers in using energy more efficiently and provides the utilities with timely cost recovery and earnings opportunities; that the state has authority to adopt building/residential codes that exceed the most recently published International Energy Conservation Code, a commercial building cost that meets or exceeds certain ANSI standards and a plan is developed for achieving compliance with such standards in at least 90% of new construction or renovations within 8 years of the date of enactment; and that the state will give priority to projects that include an expansion of existing energy efficiency programs to support renewable energy projects to advance more efficient and effective use of this funding.
Emergency Food and Shelter (McKinney/Vento)
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $99m
This federal program, which is administered by FEMA, is intended to supplement the work of local social service organizations – both private and governmental – to help people in need of emergency assistance.
TEFAP – The Emergency Food Assistance Program
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $100m
TEFAP is a program of the U.S. Department of Agriculture that helps supplement the diets of low-income people by providing emergency food and nutrition assistance. This is accomplished via the donation of federal commodities to local voluntary feeding programs; there are approximately 250 such programs in Maine. The Maine Department of Agriculture is the federally designated agency for TEFAP.
Immunization Grant Program (Section 317)
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $300m
This federal program provides grants to all states for vaccines for underinsured children and adolescents not otherwise served by the federal Vaccines for Children program. The Maine Department of Health and Human Services is the federally designated recipient of these grant funds.
Foster Care/Adoption Assistance
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $843.5m
Title IV-E provides federal monies to states to help defray the costs of children placed in foster or other types of out of home care pursuant to a court order or voluntary placement agreement. The Maine Department of Health and Human Services administers this program in our state. The Act temporarily increases the federal match rate for this program by 4.9 percentage points.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $97.7m
The federal Administration on Aging administers a range of aging services programs including Congregate Nutrition Services and Home-Delivered Nutrition Services – Meals on Wheels. The Maine Department of Health and Human Services will receive the recovery monies allocated to Maine to enhance these programs at the local level.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $2b
The federal Child Care and Development Block Grant program provides assistance to low income families and those transitioning from public assistance with obtaining child care. This program is administered at the federal level by the US Department of Health and Human Services; the Maine DHHS administers the program at the state level. The Act makes the entire amount of enhanced funding available upon enactment. These funds are intended to supplement rather than supplant state General Fund monies already used for this purpose.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $663.3m
Head Start and Early Head Start are programs of the federal Department of Health and Human Services that are focused on the provision of comprehensive education, health, nutrition and parenting education services to low income children and their families. The Maine DHHS administers the program at the state level. The appropriation in the Act is about equally split between Head Start and Early Head Start. The Head Start monies will be allocated according to the current federal statutory formula; the Early Head Start monies will be awarded on a competitive basis.
Community Services Block Grant
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $979.6m
The Community Services Block Grant is a federal program that provides funds intended to alleviate the causes of poverty in local communities. These funds support employment, food, housing and health care for those hardest hit by the recession. These funds will be apportioned to states based on current federal formulas. The Act requires states to reserve 1% of their allocation for the purposes of benefit coordination services and to distribute the remaining funds directly to local eligible agencies. The Act also allows states to increase the income eligibility ceiling from 125% of poverty to 200% of poverty for services provided under this block grant program during federal fiscal years 2009 and 2010.
Preliminary Estimate of Allocation (FFIS, 2/18/09)
Title I/Grants to LEAs & School Improvement – $12.9b
Special Education – $12.1b
McKinney-Vento Education for the Homeless – $69.2m
Special Education recovery monies are provided under the guidelines of the Individuals with Disabilities Education Act or IDEA. The IDEA recovery monies provided are for school years 2009-10 and 2010-11. Almost all of the funding available is for the population ages 5-20; a small amount is available for the preschool population. These funds will be apportioned to states in accordance with a fixed federal formula. The funds will be received by the Maine Department of Education which, in turn, will distribute the funds in accordance with a fixed formula.
The federal McKinney-Vento program provides funds to support the education of homeless students. These funds will be apportioned to states on the basis of the number of homeless students identified in the 2007-08 school year in a state relative to the national number of homeless students in the same year.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $540m
These funds will be apportioned to states on the basis of existing formulas for state grants for state vocational rehabilitation services to serve people with disabilities, to prepare them for gainful employment. These monies will be distributed in accordance with the existing federal formula for apportionment.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $18m
These monies are made available through the Rehabilitation Services and Disability Research portion of the Act. These monies are specifically for state grants for the support of independent living.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $645m
The principal goal of the Education Technology Program is to improve student achievement through the use of technology in elementary and secondary schools. Additional goals include helping all students become technologically literate by the end of the eighth grade and, through the integration of technology with both teacher training and curriculum development, establishing research-based instructional methods that can be widely implemented. The Recovery Act does not impose new program elements or other requirements on the program.School Lunch Equipment
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $89.9m
This appropriation represents additional monies for the federal Richard B. Russell National School Lunch Act to carry out a grant program for school lunch equipment assistance. The funds will be apportioned to states in amounts proportional with each state’s administrative expense allocation. States, in turn, are to provide competitive grants to school food programs based on the need for equipment, with priority given to schools where 50% or more of the students are eligible for free or reduced-price lunch.
Work StudyPreliminary Estimate of Allocation (FFIS, 2/18/09) – $200m
These recovery monies will supplement the appropriation for federal work-study (FWS) programs authorized under the federal Higher Education Act. The additional appropriation will remain available through September 30, 2011. FWS funds are accessed through participating higher education institutions; there are no changes in eligibility for FWS funds included in the Act.
Public Housing Capital FundPreliminary Estimate of Allocation (FFIS, 2/18/09) – $3b
These monies will provide additional support to the federal Department of Housing and Urban Development’s Capital Fund. The Fund provides funds to public housing authorities for the development, financing and modernization of public housing developments, as well as for management improvements. These monies are apportioned to states based on a HUD formula. In allocating the monies at a local level, public housing authorities are to give priority to capital projects that can be under contract within 120 days of funding availability; all monies must be expended within 3 years.
HOME/Home Investment Partnerships ProgramPreliminary Estimate of Allocation (FFIS, 2/18/09) – $2.25b
This portion of the Act provides additional monies for capital investments in low-income tax credit projects, helping fill financing gaps in low income housing tax credit projects. Funds will be made available to state housing credit agencies and will be apportioned on the basis of the percentage of HOME funds apportioned to each state in federal fiscal year 2008. Housing credit agencies, in turn, are required to distribute the apportioned funds competitively pursuant to their qualified allocation plan, to owners of projects who receive a low-income housing tax credit award. Housing agencies must commit at least 75% of the recovery monies they receive under this provision within 1 year of the date of enactment. Moreover, project owners will be required to demonstrate that they have expended 75% of the funds made available to them within 2 years of the date of enactment, with 100% of the funds expended within 3 years. If owners fail to meet this requirement, the funds will be redistributed to more deserving projects in the state.
Housing authorities must give priority to projects that are expected to be completed within 3 years of the date of enactment.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $1.5b
This provision of the Act provides additional monies to the federal Department of Housing and Urban Development for homelessness prevention and rapid re-housing activities; these monies will remain available until September 30, 2011. Funds will be apportioned on the same basis as are HUD’s Emergency Shelter Grants program monies. While these funds will remain available until September 30, 2011, all monies must be expended within 3 years of the date they become available.
Assistance to Crime Victims
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $95m
The Act provides additional monies for victim compensation and assistance programs administered by the US Department of Justice’s Office for Victims of Crime (VOCA). Approximately half of the available monies will be apportioned to state agencies that administer VOCA programs for victim compensation on the basis of current federal formulas. The other half of the funding will be apportioned to state agencies that administer VOCA programs for crime victim assistance programs. Finally, a small portion of the funds ($5m) will be set aside for discretionary grant projects, to be awarded by the DOJ through its National Field-Generated Training, Technical Assistance and Demonstration Projects grant solicitation, which is currently open for proposals.
In Maine, the VOCA victim assistance program is administered by Maine DHHS. The VOCA victim compensation program is administered by the Office of the Attorney General.
Internet Crimes Against Children
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $50m
The Act provides additional funding for the Office of Justice’s Internet Crimes Against Children (ICAC) Task Force initiatives, which are aimed at investigative responses to predators using the Internet to sexually exploit children. Funds are awarded to state and local law enforcement agencies to undertake local ICAC initiatives.
Violence Against Women
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $225m
The Act provides the Department of Justice, Office on Violence Against Women, with additional monies to combat violence against women. Slightly more than 20% of these funds are set aside for transitional housing assistance for victims of domestic violence, stalking or assault. The balance of the money will supplement the current appropriations of the Office, to be distributed using the Office’s existing formula grants process.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $1.98b
These recovery monies are to be used to assist in the prevention, combating and prosecution of crime. Monies are allocated using an existing formula based on population and crime statistics. Traditionally, these monies have been “split” 60/40 between state and local recipients.
Unemployment Insurance State Administration
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $500m
Each state will receive additional UI administrative funding under the terms of the Act; monies will be apportioned in accordance with existing allocation formulas.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $397m
This provision of the Act will provide additional monies to state employment service agencies, under the terms of the Wagner-Peyser Act. Of the total appropriation, approximately 63% is for customized re-employment services to Unemployment Insurance (UI) claimants. Recovery funds may also be used to improve the information technology systems required to identify and serve the needs of UI claimants. Monies will be apportioned to states based on 3 factors: the number of persons in the labor force; the rates of unemployment; and the state’s relative share of long-term unemployed individuals.
Community Service Employment for Older Americans
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $120m
Community Service Employment for Older Americans is a program of the US Department of Labor that provides subsidized, part-time community service work based training to low-income persons ages 55 and older, or to those with poor employment prospects. This program makes the services of Career Centers available to this segment of the population. The Act makes additional funds available to the program; these funds will be available until June 30, 2010. Approximately 22% of program funds are currently allocated to states; the balance is competitively awarded to private organizations. The recovery monies will be allotted within 30 days of enactment to current grantees in proportion to their grant allotment in 2008.
Workforce Investment Act
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $1.7b
The Act makes an additional $500m available for employment and training activities for eligible low-income adults and $1.2b is available for youth activities, including summer jobs. The Act extends the eligibility for youth programs to age 24.
Preliminary Estimate of Allocation (FFIS, 2/18/09) – $1.25b
This provision of the Act makes additional monies available for employment and training programs under the Workforce Investment Act of 1998. Monies support services for people who have been laid off or who have been notified they will be terminated or laid off from their jobs.
Reduction in 2009 Tax Liability ($ Millions)
Federal tax liability of Maine residents
1) Making Work Pay Credit
Refundable credit of 6.2% of earned income up to $400 ($800 joint returns); phase-out begins for modified AGI above $75,000 ($150,000 joint returns)
2) Earned Income Tax Credit expansion in 2009 and 2010
Increase credit rate for families with 3 or more qualifying children from 40% to 45%; reduce marriage penalty
3) Refundable child tax credit expansion
Reduce the earnings threshold for the refundable portion of the credit from $12,550 to $3,000
4) American Opportunity Tax Credit
Expand HOPE Credit so that it is available for four years at a rate of 100% for the first $2,000 of qualified expenses and 25% of the next $2,000 of qualified expenses; make 40% refundable; broaden definition of qualified expenses
5) Exempt first $2,400 of unemployment compensation from AGI
6) Expand first-time homebuyer credit
Increase the credit to $8,000 and waive the repayment requirement if the house is not sold within 36 months of purchase
7) Deduction for sales tax on new car purchases
Taxpayers can increase either their itemized or standard deduction by the amount of the sales tax on the first $49,500 of a new car purchase in 2009; phase-out begins at $125,000 ($250,000 joint)
8) Increase individual AMT exemption
9) Continuation of Section 179 expensing
Maximum Section 179 deduction increases from $125,000 to $250,000; investment limitation increases from $500,000 to $800,000
10) Continuation of bonus depreciation
Total, excluding the cost of the AMT patch
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