The American Recovery and Reinvestment Act and Texas Budget Issues, November 18, 2010 Eva DeLuna Castro, Budget Analyst

Larger Impact on Texas Economy February 2009 estimate

ARRA Appropriations in State Budget (HB 4586, 2009 and SB 1, : $14.4 billion)

Biennial Total: $182.7 billion Texas State Revenue for “Ongoing” Federal

Update of ARRA Funds in State Budget As of November 2010: $13.8 billion for (increase of $1.7 billion) Where ARRA Was Used Instead of GR Millions of $

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 TxDOT 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$71 million National Institutes of Health, National Science Foundation, and other Higher Ed Research $306 million Construction of veterans homes, A&M Life Sciences Building$36 million Federal financial aid for higher ed$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 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 PreK-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.)