The American Recovery and Reinvestment Act and Texas

The American Recovery and Reinvestment Act and Texas Budget Issues, 2009 -13 November 18, 2010 Eva De. Luna Castro, Budget Analyst deluna. castro@cppp. org

Larger Impact on Texas Economy February 2009 estimate

ARRA Appropriations in State Budget (HB 4586, 2009 and SB 1, 2010 -11: $14. 4 billion) Child Care, Employment/ All other, Training, $413 million $437 million Temporary K-12 Increases, $2. 3 billion Replace GR for Medicaid, $4. 1 billion (29%) Energy and Housing, $830 million Transportation, $2. 3 billion Replace GR for Education, $3. 8 billion (27%)

Texas State Revenue for 2010 -11 Biennial Total: $182. 7 billion Interest & Investments 3% Other nontax 10% ARRA Federal 7% Licenses, Fees, Fines, Tolls 8% Other Taxes 7% Gasoline Tax 4% HHS 19% “Ongoing” Federal Motor Vehicle Sales Tax 3% Franchise Tax 5% Education 5% Highway 3% Other Fed. 3% Sales Tax 24%

Update of ARRA Funds in State Budget As of November 2010: $13. 8 billion for 2010 -11 (increase of $1. 7 billion) Millions of $ $0 $2 000 $4 000 Pre. K-12 - Stabilization $ 3 614 Pre. K-12 - Other $ 2 307 $ 359 Higher Ed - Stabilization HHS agencies Tx. DOT $ 3 915 $ 1 639 $ 662 Workforce Commission $ 580 Housing & Comm Affairs $ 565 Attorney General $ 276 State Energy Programs $ 290 Other $6 000 $ 177 $ 1 672 2009 2010 -11 Where ARRA Was Used Instead of GR

ARRA Jobs Created by State Budget 3 rd quarter of federal fiscal 2010 Education: almost 29, 500 local school district jobs retained or created; 2, 800 higher education jobs (state) HHS: 1, 600 jobs retained or created at the Department of Family and Protective Services (CPS investigators/other front-line staff) Highway construction: 3, 400 local jobs created through Tx. DOT contracting for highway construction, repairs, and maintenance Home weatherization, tax credit assistance, homelessness prevention and housing: Housing & Community Affairs reported 28 new state jobs and over 1, 200 jobs created locally Child care subsidies, employment and training programs, Unemployment Insurance benefits: Workforce Commission reported 409 new state jobs and almost 450 jobs created locally TOTAL: 4, 925 state jobs retained or created; 35, 484 local jobs in public/private sectors

ARRA Through State Agencies, but Not in the State Budget As of Nov 2010 Unemployment Benefits $3. 7 billion Housing Tax Credit Exchange Program $594 million Medicaid Upper Payment Limit $404 million Clean Water State Revolving Funds $179 million Safe Drinking Water State Revolving Funds $161 million Medicaid Disproportionate Share National Institutes of Health, National Science Foundation, and other Higher Ed Research Construction of veterans homes, A&M Life Sciences Building Federal financial aid for higher ed $71 million $306 million $36 million $9 million COBRA for state employees; Health Information Technology; Build America Bonds; all other $72 million Total $5. 6 billion

ARRA Impact on Budget Requests for 2012 -13 HHS Agencies are asking for $5. 3 billion (23%) more in General Revenue for the “baseline” – 70% of this additional GR is needed to replace ARRA, mostly for Medicaid ($4. 7 billion) For exceptional HHS items: $2. 6 billion more in GR, of which $334 million would replace ARRA funding TOTAL current services needs for HHS: agencies need $7. 5 billion more in GR for Baseline and Exceptional Items to maintain current services. $4 billion of this GR is to fill “holes” where ARRA was used in 2010 -11. Pre. K-12 Education: Texas Education Agency originally asked for a $9 billion GR increase for Foundation School Program and other education programs. $3. 25 billion of this was requested to replace ARRA Stabilization funds. (Funding request for FSP is expected to increase by $2 to $3 billion based on October 2010 estimate of drop in local property tax collections. )