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

2. Larger Impact on Texas Economy February 2009 estimate

3. ARRA Appropriations in State Budget (HB 4586, 2009 and SB 1, 2010-11: $14.4 billion)

4. Biennial Total: $182.7 billion Texas State Revenue for 2010-11 “Ongoing” Federal

5. Update of ARRA Funds in State Budget As of November 2010: $13.8 billion for 2010-11 (increase of $1.7 billion) Where ARRA Was Used Instead of GR Millions of $

6. 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

7. 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

8. 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. 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.)