UPDATE ON ThE
AMERICAN RECOvERY AND
REINvESTMENT ACT OF 2009
Congress passed the American Reinvestment and
Recovery Act (ARRA) on February 17, 2009 to create new
jobs and save existing ones, spur economic activity and
invest in long-term growth, and provide accountability
and transparency in government disbursement of funds.
To accomplish these goals, Congress allocated $787 bil-
lion in economic aid through spending and tax cuts. As
of February 26, 2010, roughly $287 billion (or 37 percent)
of the package has been spent, with nearly $500 billion
remaining in tax benefits, contracts, grants and loans and
entitlements. Below are few updates on agencies and their
programs created through the ARRA:
The environmental Protection agency (ePa) announced
in October 2009, that the Energy Star program is off to a
slow start. Despite the high interest in the program, which
offers a roadmap to grow green job opportunities, boost
energy savings and reduce emissions, a series of barri-
ers have prevented a self-sustaining retrofit market from
forming. The Recovery Through Retrofit report recom-
mended a series of actions be taken for the successful
implementation of the program, including comprehensive
training programs for workers, reducing upfront costs and
increasing awareness of the program. As of February, 2010,
the EPA still has over $5.9 billion (of the original $7.11 bil-
lion) of funds available to spend on various programs.
In January 2010, the department of transportation
(dOt) kicked off construction on a project that will give
drivers using the Caldecott Tunnel near Oakland and San
Francisco two additional lanes to alleviate traffic congestion. The $420 million project, which will create a fourth
tunnel, will use $197.5 million from the ARRA. The DOT
has roughly $27.4 billion dollars of the allotted $36.8 billion in stimulus funds still available as of February 2010.
The department of housing and urban development
(hud) awarded $95 million in competitive grants in
September 2010. This funding will allow public housing
authorities throughout the country to make necessary
improvements to communities that address the needs of
seniors and persons with disabilities. As of February 2010,
HUD has approximately $10.2 billion in funds available of
the initial $13.3 billion arranged through the ARRA.
states Continue to struggle
with Budget shortfalls
Despite hopes that the worst economic recession since
the Great Depression would end quickly, the U.S. economy continues to struggle and its effects are still being
felt throughout all 50 states. Unemployment rates at 10
percent in some states, decreased sales tax revenues,
decreased income tax revenues, and increased costs
have combined to create gaping budget holes.
Unlike the federal government, states are not permit-ted to run budget deficits. They must balance their budgets prior to the start of their fiscal year. Budgets are
balanced according to projected revenues and projected
costs, and fluctuations in actual revenue and expenses
can severely alter the financial outlook for the states.
In order to reconcile a collective $158 billion in revenue shortfalls prior to the beginning of the FY2010
business cycle, 48 states employed a strategy of spending cuts combined with tax and fee increases. Despite
efforts, 41 states are facing $38 billion in new revenue
shortfalls this fiscal year.
Funding from the economic stimulus package has
provided temporary relief for states. States have been
able to fill 30 to 40 percent of their budget deficits with
money from the $787 billion economic stimulus package. However, of the roughly $250 billion of the stimulus package set aside for states, most will have been
distributed by the end of 2010, which will only cover
about 20 percent of state budget shortfalls for 2011.
Total shortfalls for states in 2010 and 2011 are likely
to reach some $375 billion.
IREM will continue to monitor the national fiscal condition and advocate for fiscal policies that are in members’ best interests.