Washington, DC – U.S. Senator Feinstein (D-Calif.) today issued the following statement about some of the funding details for California included in the conference report for the economic recovery package. The House and Senate voted on the conference report on Friday.

“This may not be the bill that I would have drafted, but it is the bill that can get enacted. Therefore, it becomes either this bill or no bill,” Senator Feinstein said. “Once this bill is enacted, California will gain substantial revenue and be able to move these revenues directly into job production. The White House has estimated that the bill could create as many as 396,000 jobs in California. So, this would be a big boost for our State.

The attached is our preliminary analysis of the Economic Recovery conference bill and, in particular, its impact on California. There are certain key elements in this bill which could be a big help to California, and they are as follows:

• $2.5 billion for California’s highways, roads and bridges.  

Millions of drivers depend on California’s highway systems to get them to work every day. But many of the roads are aging and are in need of repair. Others are filled with gridlock and in need of expansion. This funding will be a significant boost to the State’s efforts to modernize our highways, roads and bridges. Of particular note to California, the conference report includes maintenance of effort language, which would ensure that the Governor certifies that the State will not backfill its own transportation budget with these funds, but will contract for additional road and bridges funding.
 

• $444 million for California’s drinking water and wastewater infrastructure.

Water is one of the most precious of California’s resources. But the State’s infrastructure has long struggled to meet the demand for clean and safe drinking water. This funding will help California modernize our water infrastructure and meet environmental quality standards.

• $324 million for California’s affordable housing block grant.

This money can be used by California’s communities to get stalled housing development projects for low-income families moving again. There are over 300 affordable housing development projects in the state which are ready to go, including Harrison Street Senior Housing in Oakland that would provide 73 housing units for very-low income seniors.  So, this funding can help kick-start these affordable housing projects back into development.

• $118.5 million for California’s Public Housing and $190 million for Homeless Prevention

This funding could help California meet its chronic shortage for low-income housing and housing for the homeless. Specifically, it would help fund the upgrading of public housing and provide much-needed rental assistance and utility payments. This can be a vital safety net program.

• $127 million for the Community Development Block Grants (CDBG) in California.

California cities and counties rely on this funding to meet some of their greatest municipal needs, including housing projects, job training, police stations and sewer infrastructure.  This funding can be put into projects that can produce jobs.

• $2 billion nationwide for the Neighborhood Stabilization Program.

California has been one of the major epicenters of the housing crisis. In communities across the State, hundreds of thousands of homeowners have lost their homes to foreclosure and have left their property vacant and blighted, which in turn, further exacerbates falling home values for other homeowners in their neighborhood.  This funding will give local governments the resources needed to redevelop foreclosed and abandoned homes, and combat blight in neighborhoods hard-hit by foreclosures.

• $230 million for Byrne Justice Assistance Grant Program.

The Byrne Justice Assistance Grant Program is critical to public safety in California. Law enforcement agencies throughout the State rely on this funding for a range of programs, including drug and gang task forces, assistance for crime victims, and child safety protection programs. Now more than ever, we need to ensure that our law enforcement officers have the funds and tools they need to keep our communities safe from harm.
 

• Approximately $4.85 billion for California from the new State Fiscal Stabilization Fund

This funding is critical for California to prevent major cuts to education programs and other high priority needs, in addition to repairing school facilities and higher education facilities. In California, 69 percent of the state’s 300,000 classrooms are more than 25 years old – so there is a major need for repairs to fix ceilings, install air conditioners, and make seismic repairs.

• $8 billion nationwide for Intercity Passenger Rail and High Speed Rail (competitive grant program)

I am particularly pleased about the addition of $8 billion in competitive grant funding for intercity and high speed rail projects across the country. This funding will help California’s communities pay for grade separations, train cars and engines, signaling and communications, and safety controls. These are projects the State can do now to help lay the framework for high speed rail in California.

• Medicaid Additional Federal Match (FMAP): $87 billion nationwide, of which California will receive approximately $10 billion.

This will help California avoid additional cuts in Medi-Cal and other safety net programs.

Bottom line: Our economy is in dire straits. And urgent action is required to get the economy moving and reverse the alarming trend of job loss that is currently plaguing our cities.

This bill will provide an important injection of federal funds into our State’s empty coffers. It will help create jobs, fund safety net programs, and improve our crumbling infrastructure. It is critical to getting our economy back on track.

The bill before us is far from perfect. But faced with a choice of this bill or nothing, the choice is clear: Congress must approve this economic recovery package.”

Analysis of the Conference Report

• Total bill: $789.5 billion
  • $29.5 billion less than House bill.
  • $48.5 billion less than Senate bill.

• The White House estimates it will create 3.5 million jobs nationwide, and 396,000 in California.

• 36 percent Finance Tax Cuts:  $301 billion.
• 25 percent Medicaid, Unemployment and Other Assistance: $177.5 billion.
• 39 percent Appropriations Package: $311 billion (Senate was $289 billion).

• Road and bridge infrastructure: $29 billion total in bill.

• This funding will create 835,000 jobs nationwide.
• California will receive $2.57 billion in highway and bridge funding.  $1,722 billion of which will be given directly to the state of California, to fund projects at the discretion of the state.  Half of this must be spent within 120 days, while $771 million will be allocated directly to local transportation planning agencies in California, and $77 million for transportation enhancements such as trails and roadside landscaping.
• Includes “Maintenance of Effort” language requested by California Mayors, which means that the Governor has to certify that the State will not backfill its own transportation budget with these funds, but will contract for additional road and bridges funding.

• Mass Transit: $8.4 billion total.
  • California will receive at least $1 billion through formula.

• Rail: $9.3 billion total.
  • $8 billion for Intercity Passenger Rail and High Speed Rail (competitive).
  • $1.3 billion for capital improvements to the Amtrak system (competitive).
    

• Clean Water and Drinking Water Infrastructure: $6 billion total.
  • California will receive $444 million.

• Army Corps of Engineers: $4.6 billion total.
  • The Appropriations Committee estimates 139,000 jobs nationwide will be created through this funding.
  • The Army Corps will determine which projects to fund in California.

• Bureau of Reclamation: $1 billion total.
  • The Appropriations Committee estimates 30,000 jobs nationwide will be created through this funding.
  • The Bureau will determine which projects to fund in California, including CALFED activities.
  • This will fund water reuse, recycling and reclamation projects, as well as other water infrastructure that will address chronic water shortage in the Western United States.

• Energy Efficiency and Conservation Grants: $3.2 billion total.
  • Funding for building code development and enforcement, efficiency improvements, renewable energy, and other city-level conservation efforts.
  • $2.8 billion will flow to cities by formula, based on population.
  • $400 million for competitive grants issued by the Department of Energy.

• Smart Grid: $4.5 billion total.
  • For electricity delivery and energy reliability activities to modernize the electric grid, including demand response equipment and smart meters.
    

• Western Area Power Administration (WAPA) borrowing authority: $3.25 billion total.
  • WAPA will be able to use this borrowing authority to build new lines or improve transmission lines to delivery renewable energy to California.
  • $10 million for WAPA to undertake construction, rehabilitation, operations and maintenance activities.

• Community Development Block Grant Program (CDBG): $1 billion total.
  • CA would get $127 million for cities and counties to target funds for their greatest needs, including housing projects, job training, police stations and sewer infrastructure.

• Neighborhood Stabilization Program: $2 billion total.
  • Competitive funding grant.  This funding is critically needed to continue to provide States and local governments with resources to redevelop foreclosed and abandoned homes, and combat blight in neighborhoods hard-hit by foreclosures.

• Public Safety and Law Enforcement: $4 billion total.
  • Byrne/JAG funded at $2 billion, of which California will receive $230 million
  • $1 billion for Community Oriented Policing Services (COPS). This will hire/retain 13,000 officers nationwide

• Affordable Housing Block Grant (HUD HOME program): $2.25 billion.
  • Competitive grants to states and local governments to build affordable homes for low-income families. 
    
  • CA would likely compete well for these funds – receiving approximately  $324 million.
  • This funding could also be used for the Low-Income Housing Tax Credit Program, to fill financing gaps caused by the credit freeze to get stalled housing development projects moving.  California housing groups have been supportive of this funding.

• Public Housing Capital Fund: $4 billion total.
  • Competitive grants to help public housing agencies nationwide address the $32 billion backlog in capital needs, and would create or preserve thousands of jobs in the housing construction sector devastated by the current recession.

• Homelessness Prevention: $1.5 billion total.
  • Allows for rental assistance and utilities payments.
  • California would receive $190 million.

• Weatherization Assistance Program: $5 billion total.
  • California will receive $190 million.

ENERGY RESEARCH

• Energy Efficiency and Renewable Energy Research: $2.5 billion.
  • Dramatically increases funding for existing competitive grant programs for applied research, development and deployment of biomass energy, geothermal, efficiency, and other renewable energy technologies.

• Advanced Battery Manufacturing Grants: $2 billion.
  • Competitive grants to develop light-weight and long-lasting batteries for electric vehicles.

• Loan Guarantees for Renewable Electricity Projects: $6 billion.
  • To help ease the flow of credit to renewable energy projects such as wind, solar, or advanced biofuels, and transmission.

EDUCATION: $105 billion total

• California is estimated to get close to 10 percent of this funding ($9.5 billion) to help school districts facing major cuts and students afford college.

• State Fiscal Stabilization Fund: $53.6 billion.
  • Provides flexibility to States and schools to use this fund for repair projects.
  • $39.5 billion would be allocated to school districts through existing Federal program formulas (Title I program), which can also be used for school repairs.
  • $8 billion to States for high priority needs, such as public safety, and can also be used for repairs of public school facilities and higher education facilities.
  • CA is estimated to get around $4.8 billion.  

• Title I Education: $13 billion.
  • California will receive $1.59 billion based on formula.

• Pell Grants:  $15.6 billion total.
  • This funding level would increase the maximum Pell Grant by $500 for total of $5,350 in 2009 and $5,550 in 2010.

• Individuals with Disabilities Education Act (IDEA) Special Ed: $12.2 billion.
  • CA will receive about 11 percent (roughly $1.22 billion) to help school districts educate and provide services to special need students, based on formula.

• Head Start/Early Head Start: $2.1 billion.
  • CA will receive about $82.7 million to serve thousands of low-income children, based on formula.

Health and Nutrition

• Medicaid Additional Federal Match (FMAP): $87 billion
  • 35 percent of this funding will be allocated to states based on increases in their unemployment rates.  States will receive a uniform increase in their matching rate for the additional 65 percent.  
  • California will likely receive approximately $10 billion of this funding.  

• COBRA subsidy for the unemployed.  Estimated cost is $24.7 billion.
  • The bill provides a 65 percent subsidy for COBRA premiums for up to 9 months for workers who have lost their jobs between September 1, 2008 and December 31, 2009.
  • Workers receiving the subsidy must attest that their income will not exceed $125,000 for individuals and $250,000 for families.

• Health Information Technology: $19.2 billion total (split between Appropriations and Finance)
  • Includes $2 billion in discretionary funds and $17 billion for investments and incentives through Medicare and Medicaid to ensure widespread adoption and use of interoperable health IT.

• Food stamps: $20 billion nationwide. California would receive $1.6 billion to benefit more than 2 million Californians.

Taxes Highlights

• $116 billion “Making Work Pay” tax credit.  $800 per couple and $400 per individual.  The credit begins to phase out at $75,000 for individuals and $150,000 for couples.
• Approx. $70 billion for a one-year Alternative Minimum Tax fix.
• $2,500 tax credit for higher education expenses at a cost of $14 billion.
• $7,500 homebuyer tax credit (this is a technical change to a tax credit enacted last year; the repayment requirement is now waived).  The Senate version of the bill would have cost more than $30 billion, but this provision reduces that amount to $6.6 billion.  
• Tax deduction for State and local sales taxes paid on the purchase of a new car at a cost of $1.7 billion.
• The bill provides grants en lieu of tax credits for renewable energy (addressing the concerns of the California solar industry).