Summary of the Federal Economic Stimulus Package
February 21, 2009
This is a partial summary of the federal economic stimulus package, known as the American Recovery and Reinvestment Act. For more information, go to http://www.recovery.gov/.
AMERICAN RECOVERY AND REINVESTMENT ACT
$789 billion estimated cost:
- $227 billion will be sent directly to states.
- $326 billion is included in business and personal tax cuts.
- $216 billion will be divided between federal agencies and various competitive grant programs.
Recovery Act funds can be tracked at http://www.recovery.gov/ as agencies begin spending and reporting their expenditures.
Fiscal Stabilization Fund for Education: $39.7 billion total
- Texas allocations: $3.1 billion
- Provides funding to local school districts to prevent budget cutbacks and layoffs, and provides for school modernization.
Title I Grants: $9.9 billion total
- Texas allocations: $950 million
- Title I grants fund academic support programs for disadvantaged children who are struggling to meet state education standards.
Special Education- Parts B & C: $11.7 billion total
- Texas allocations: $1.2 billion
- These grants help states provide special education and related services to children with disabilities.
Pell Grants: $15.6 billion total
- Individual allocations: $500 increase for 2009-10 school year
- Combined with other recent increases in the program, the maximum per student Pell grant award is $5,350 per school year.
Central Texas allocations:
- Austin ISD: $41 million
- Round Rock ISD: $9 million
- Pflugerville ISD: $4.3 million
- Leander ISD: $3.9 million
- San Marcos ISD: $2.7 million
ENERGY AND ENVIRONMENT
Weatherization: $5 billion total
- Texas allocations: $236 million
- Grants help cover some of the costs of insulating low-income residences.
Clean Water and Drinking State Revolving Funds: $6 billion total
- Texas allocations: $342 million
- Provides two-thirds of funds to the Clean Water SRF which provides grants to states for wastewater treatment projects. The Drinking SRF receives one-third of the funds for drinking water infrastructure projects.
Energy Tax Cuts:
- The legislation increases to 30% the tax credit for non-business energy property.
- It also removes the cap on the tax credit for residential wind, geothermal property and residential solar thermal property.
Medicaid: $87 billion total
- Texas allocations: $5.5 billion
- Additional funds allow states to expand eligibility for Medicaid. States with large unemployment increases get additional funds.
COBRA: $24.7 billion total
- Individual allocations: 65% of COBRA costs
- Individuals forced out of their job between 9/1/08 and 12/31/09 are eligible for a 65% federal subsidy (through their former employer) of the cost to maintain their health insurance through the program know as COBRA.
Child Care Development Block Grant: $2 billion total
- Texas allocations: $214 million
- Distributes funds to states through existing programs for child care services for low-income families
Highways: $27.5 billion total
- Texas allocations: $2.25 billion
- Central Texas allocations: $30 million
- Half of the state funds must be obligated within 120 days while the remainder and all locally controlled funds must be obligated within a year. The funds can be used for highway, major road, bicycle, pedestrian and trails projects, but cannot replace local or state funds already set aside for a project.
Urban Transit: $5.9 billion total
- Texas allocations: $321 million
- Central Texas allocations: $30 million
- Contracts for half these funds must be signed within 180 days, the remainder to purchase buses and related equipment.
Individuals and families:
- 95% of families will receive a tax cut.
- The bill includes a temporary increase in the earned income tax credit for families with three or more children.
- It includes an additional income tax credit up to $400 for individuals and $800 for spouses filing jointly for 2009 and 2010.
- It expands the refundable portion of the child tax credit eligibility through 2010.
- It extends the alternative minimum tax (AMT) patch for 2009.
- It allows a federal income tax deduction for state and local sales taxes paid on the purchase of new vehicles through 2009.
- It creates a one-time $250 payment to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, disabled veterans receiving benefits from the Department of Veterans Affairs, and Railroad Retirement beneficiaries.
- The bill creates two new target groups for the Work Opportunity Tax Credit – unemployed veterans and “disconnected youth” who are hired in 2009 or 2010.
- It increases from 50% to 75% the exclusion from capital gains taxes for sales of small business stock.
- It extends the carry-back provision for net operating losses from two to five years.
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Political advertisement paid for by Kirk Watson Campaign,
P.O. Box 2004, Austin, TX, 78768; Rosie Mendoza,Treasurer.