American Recovery and Reinvestment Act (ARRA) Funds Impacting California

October 13, 2009 |   | Contact: M. Daniel DeCillis

The federal stimulus package enacted earlier this year is intended to jumpstart the economy and provide support to individuals through a variety of programs. Overall, the governor’s office estimates that ARRA will result in approximately $85 billion in benefits to California. Projected ARRA benefits for California break down as follows:

  • Tax relief: $30.2 billion
  • Health & Human Services: $19.5 billion
  • Education: $11.8 billion
  • Labor: $5.2 billion
  • Transportation: $4.7 billion
  • Other: $3.3 billion
  • Energy: $3.0 billion
  • Water & Environment: $2.5 billion
  • Science & Technology: $2.4 billion
  • Housing: $2.1 billion
  • Public Safety: $0.7 billion

Below are highlights of some of the ARRA funding disbursed in California in selected areas.

Education

Governor Schwarzenegger announced in September that $1.3 billion in expedited State Fiscal Stabilization Funds (SFSF) will be available for California’s school districts, colleges and universities during the 2009-10 school year. In May, the U.S. Department of Education provided California $3.2 billion for the first phase of SFSF, 67 percent of California’s total $4.9 billion allocation, to help mitigate the effects of budget reductions to education. The second installment of SFSF funds were not scheduled to be released to states until December; however, ARRA permits states facing extreme budget difficulties to apply for 90 percent of funds during the first phase. Governor Schwarzenegger petitioned for 90 percent of the state’s total SFSF allocation on August 27 and the U.S. Department of Education granted it.

Water & Environment

In July the U.S. Environmental Protection Agency (EPA) awarded $2.8 million to the California State Water Resources Control Board under ARRA. A total of $39 million will be awarded nationally to states for Water Quality Management Planning (WQMP) grants, which will keep and create jobs to help prevent water pollution and protect human health and the environment.

“The Recovery Act investments are meeting urgent needs for economic growth and protecting human health and the environment,” said EPA Administrator Lisa P. Jackson. “Communities across the nation can count on green jobs to help pull them out of this downturn and ensure the long-term strength of our economy and our environment.”

“With this infusion of Recovery Act funding, California will have more resources for high priority projects and the promotion of water and energy efficiency projects,” said Laura Yoshii, acting regional administrator for the EPA in the Pacific Southwest. “This funding will not only make it possible to focus on this critical work, it will also create and save California jobs.”

To date, $1.2 billion in water and environmental funds have been awarded to California, with major recipients including the Army Corps of Engineers ($248 million), the Clean Water State Revolving Loan Fund ($280 million), and the Bureau of Water Reclamation ($391 million).

Energy

In July, U.S. Department of Energy Secretary Steven Chu announced $308 million in American Recovery and Reinvestment Act (Recovery Act) funding for Hydrogen Energy International to move forward with its Hydrogen Energy California (HECA) project in Bakersfield, CA. When built, HECA will bring clean power to over 150,000 homes in the local community, create new jobs and avoid the emissions of more than two million tons of greenhouse gases into the atmosphere every year.

“California is a leader when it comes to innovation and clean technology, so it makes perfect sense that a hydrogen energy project be built here. This project is a fantastic use of Recovery Act dollars because it will not only create green collar construction jobs, but it will avoid greenhouse gas emissions and further propel us toward a clean energy future,” said California Recovery Task Force Director Cynthia Bryant.

The HECA project is an Integrated Gasification Combined Cycle power plant that will take petroleum coke, biomass, coal or blends of each, combined with non-potable water to convert them into hydrogen and carbon dioxide (CO2). The hydrogen gas will be used to fuel a 250-megawatt power station that will provide clean electric power to 150,000 homes in the local community. The CO2 will be transported by pipeline to nearby oil reservoirs and injected for permanent storage, which will enable additional production from existing California oilfields.

Hydrogen Energy International also estimates that the project will boost the local economy, creating up to 1,500 construction jobs.

Overall, the governor’s office reports that $376.4 million in ARRA energy funds have been awarded to California, out of a total $2.2 billion the state eventually expects to receive.

Science & Technology

California will receive an estimated $2.4 billion in Recovery Act dollars to further its technology infrastructure and scientific research. A portion of the funds will be used to invest in California’s broadband infrastructure to help bring broadband service to rural and underserved communities, create jobs and stimulate economic growth. An estimated $200 million will also be used to improve health information technology, which will facilitate statewide electronic health data exchange, as well as to construct, modernize and repair research facilities, update research equipment and further research and related activities.

To date, approximately $464 million in ARRA funds for S&T related programs has been received, including $73 million for research and related from through the National Science Foundation; $17.5 million through the National Institutes of Health; and $16.8 through the National Science Foundation for education.

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