Read a pdf of the fact sheet How Will the Federal Recovery Package Help Struggling Oregonians and the State’s Economy?
The recently approved $787 billion American Recovery and Reinvestment Act (ARRA) of 2009 demonstrates the crucial role that government plays in the economy, as the package promises to bolster struggling households, states and businesses.
What does the package mean for Oregon?
Overall, the package is structured to generate meaningful stimulus in states including in Oregon. According to a White House estimate, the package will create or save 44,000 jobs in Oregon.
This fact sheet lists tax cuts and spending provisions in the ARRA that will boost income for Oregon and its people and for which there is data available on the expected amount to be invested in Oregon. The combined impact in Oregon of the provisions listed in this fact sheet is $5.5 billion.
In addition to the measures listed below, the ARRA contains other provisions likely to boost Oregon’s economy but for which there is no state-level data currently available. Such provisions include a temporary increase in funds for Temporary Assistance to Needy Families and community health centers and suspended taxes on unemployment insurance benefits.
While a positive development for Oregon and the nation, the package is not perfect. It includes some tax breaks, such as bonus depreciation for business, that are widely considered by economists to be ineffectual in boosting the economy.
Oregon’s Legislative Assembly will be facing a host of decisions as a result of the ARRA package, including which federal tax law changes Oregon will recognize for state income tax purposes.
OCPP will continue to analyze the impacts of the ARRA on Oregon as more information becomes available.
Description of Selected Provisions
|
Dollars to Oregon and Oregonians |
Fiscal Relief to State and Local Governments |
|
| Medicaid — $87 billion through 2010 to help states maintain Medicaid programs. Requires states to maintain eligibility rules, pay providers promptly and provide required matching funds. | $830 million[1] |
| State Fiscal Stabilization Fund — $53.6 billion to local school districts, public universities and other public services. | $570.3 million[2] |
Help for Workers and Others Hurt by the Recession |
|
| Child Care — $2 billion to provide child care services for children of working parents. | $22.5 million[3] 4,860 Oregon children helped[4] |
| Child Support Enforcement — $1 billion to help states enforce child support directives. | $22.2 million[5] |
| Child Tax Credit — $14.8 billion to temporarily expand the credit of up to $1,000 per child by lowering the income threshold to $3,000, making more low-income families eligible. | $131.4 million[6] 198,000 Oregon children helped[7] (Impact on Oregon revenues not calculated) |
| Community Development Block Grant — $1 billion for housing and services for those hit hardest by the recession. | $10.2 million[8] |
| Community Services Block Grant — $1 billion to local communities to support employment, food, housing and healthcare services for those hit hardest by the recession. | $8.0 million[9] |
| Earned Income Tax Credit — $4.7 billion to temporarily increase the credit for working families with three or more children and to raise the starting point of the phase-out range for all married couples filing a joint return. | $50.5 million[10] (Impact on Oregon revenues not calculated) |
| Emergency Food and Shelter — $100 million for homeless individuals. | $1.5 million[11] |
| Emergency Food Assistance — $150 million for food pantries. | $1.2 million[12] |
| Foster Care and Adoption — $843.5 million. | $10.2 million[13] |
| Home Weatherization — $5 billion to help low-income families lower energy costs by weatherizing their homes. | $50.3 million[14] |
| Independent Living — $140 million for resources to improve the independence, productivity and quality of life of individuals with disabilities. | $0.2 million[15] |
| Making Work Pay Credit — $116.2 billion for new credit of up to $400 per worker, $800 per couple. Phases in at the same rate as Social Security taxes and phases out for single workers earning between $75,000 and $95,000. | $1.4 billion[16] 1,351,000 Oregonians helped[17] (Impact on Oregon revenues not calculated) |
| Senior Blind Services — $34.3 million. | $0.5 million[18] |
| Senior Nutrition — $100 million for senior food programs, including Meals on Wheels and Congregate Meals. | $1.6 million[19] |
| SNAP (Food Stamps) — $20 billion to provide a 13.6 percent increase in benefits, to temporarily lift the three-month limit for unemployed childless adults and for state administrative costs. | $307 million in increased benefits[20] $5.7 million for state administrative costs[21] 516,000 Oregonians helped[22] |
| Seniors, Veterans and People with Disabilities Benefit — $14.2 billion for a one-time payment of $250 to retirees, people with disabilities including disabled veterans and those receiving benefits from Railroad Retirement. | $182 million[23] |
| Training and Employment Services — $4 billion for job training, including state grants for adults, youth and dislocated workers, and $120 million for community service employment for low-income seniors. | $6.4 million for adults[24] $15.2 million for youth[25] $14.7 million for dislocated workers[26] $1.8 million for senior employment[27] |
| Unemployment Insurance Benefits — $8.8 billion to increase benefits by $25 per week through December 2009. $27 billion to continue extended benefits through December 2009. $7 billion in administrative funding and incentives for modernization of state programs to increase access to benefits among low-wage, part-time and other laid-off workers as provided in the Unemployment Insurance Modernization Act (UIMA). | $162.1 million for benefit increase[28]; 329,000 Oregonians helped[29] $548.4 million for extended benefits[30]; 53,000 Oregonians helped[31] $91.5 million for UIMA if Oregon adopts “Alternative Base Period”[32] |
| Vocational Rehabilitation — $540 million to promote the employment of people with disabilities. | $7.1 million[33] |
Education |
|
| Head Start and Early Head Start — $2.1 billion for preschool for disadvantaged children, including $1 billion for Head Start. | $7.2 million for Head Start[34] |
| Higher Education — $15.6 billion to increase the maximum Pell grant by $500 to $5,350 for award year 2009-10.[35] $200 million for work study programs. | $188.3 million for Pell[36] $2.7 million for work study[37] |
| K-12 Education — $27.2 billion to help prevent cuts in programs including Title I for disadvantaged children ($13 billion), IDEA for special education services ($11.7 billion), education for homeless youth ($70 million), Education Technology program for computer and science labs ($680 million) and others. | $130.6 million for Title I[38] $134.5 million for IDEA[39] $1.6 million for homeless youth[40] $6 million for Education Technology[41] |
| School Lunch Equipment — $100 million. | $0.9 million[42] |
Energy Efficiency and Renewable Energy |
|
| State Energy Program — $3.1 billion to adopt emerging renewable energy and energy efficiency technologies. | $40.3 million[43] |
Healthcare |
|
| Disproportionate Share Hospital Payment — $460 million to temporarily increase Medicaid funds to hospitals that disproportionately care for low-income, special needs patients. | $1.1 million[44] |
| Prevention and Wellness Fund — $1 billion to fight preventable diseases, including $300 million for immunization services. | $3.6 million for immunization services[45] |
Housing |
|
| HOME Investment Partnerships —$2.3 billion to build and rehabilitate low-income housing using green technologies. | $27.3 million[46] |
| Homelessness Prevention — $1.5 billion to provide short-term rental assistance, housing relocation and stabilization services. | $15 million[47] 3,400 households helped[48] |
| Neighborhood Stabilization — $2 billion to purchase and rehabilitate foreclosed and vacant properties. | $10 million[49] |
| Public Housing Capital Fund — $4 billion to repair and modernize public housing and vacant properties to create more affordable housing and prevent blight. | $14.4 million[50] |
Infrastructure |
|
| Clean Water — $6 billion in loans to upgrade wastewater treatment and drinking water systems. | $45 million for wastewater treatment systems[51] $28.7 million for drinking water systems[52] |
| Highway Infrastructure — $27.5 billion for highway and bridge construction projects. | $333.9 million[53] |
| Transit Improvement — $8.4 billion for new rail construction and modernizing existing transit systems. | $75.7 million[54] |
Public Safety |
|
| Internet Crimes Against Children — $50 million to prosecute use of computer technology to sexually exploit children. | $0.7 million[55] |
| State and Local Law Enforcement — $2 billion to prevent, fight and prosecute crime. | $22.2 million[56] |
| Victims Assistance — $100 million to support compensation and assistance to crime victims. | $0.9 million[57] |
| Violence Against Women — $225 million for prevention and prosecution of crimes against women and transitional housing. | $2.9 million[58] |
Other ARRA Provisions Will Also Benefit Oregon
ARRA also includes provisions expected to benefit Oregon but for which dollar estimates of the impact in Oregon are not available. Below is a list of some of these provisions. The dollar figures are for total national spending.
COBRA Healthcare for the Unemployed — Provides $24.7 billion for 65 percent premium subsidies to help laid-off workers continue their employer-provided health coverage for the first nine months. Also allows older and tenured workers to continue COBRA coverage beyond the 18-month limit.[59] Oregon will need to adopt authorizing legislation to utilize these funds.
Medicaid Regulations — Extends through June 30, 2009, moratoria on a number of Medicaid regulations that would cut funds to Oregon. The relevant regulations regard targeted case management, provider taxes, school-based administration and transportation services.[60]
Temporary Assistance to Needy Families — Provides up to $5 billion to help states meet increased demand for temporary cash assistance and employment services among very low-income families with children, support families who have left TANF for work and provide one-time payments to families in need. States must increase their own spending on TANF relative to a base year to receive the federal funds.[61]
Beneficial Provisions Dropped From the ARRA
The ARRA could have provided an even stronger boost to Oregon’s economy if the following provisions included in the House or Senate versions of the bill had been retained in the final legislation.
Low-Income Home Energy Assistance Program — $1 billion to help low-income families with home heating and cooling costs.[62]
Medicaid Coverage for the Unemployed — $10.8 billion to allow states to offer Medicaid coverage to low-income laid-off workers who cannot afford or do not have access to COBRA benefits.[63]
Endnotes
[1] Center on Budget and Policy Priorities (CBPP), American Recovery and Reinvestment Act of 2009: State-by-State Estimates of Key Provisions Affecting Low- and Moderate Income-Individuals, updated February 13, 2009, available at www.cbpp.org/1-22-09bud.htm (hereafter CBPP, ARRA State-by-State Estimates). CBPP reports figures from the Government Accountability Office (GAO). Center for American Progress (CAP), “Nationwide Allocation of Recovery Funding,” spreadsheet updated February 13, 2009, available at www.americanprogress.org/issues/2009/02/av/recovery_compromise.xls (hereafter CAP spreadsheet), estimates $879 million in additional Medicaid funds to Oregon. The increase in the Federal Medicaid Assistance Percentage (FMAP) to states applies to the costs of Medicaid benefits and is based on (1) a “hold-harmless” factor that would not penalize a state for an increase in its per capita income in years prior to the recession, which would decrease a state’s FMAP under the usual formula; (2) a 6.2 percent “base” increase; (3) an additional increase of 5.5 percent, 8.5 percent or 11.5 percent based on the increase in a state’s unemployment rate. Title IV-E foster care and adoption assistance FMAP rate calculation is based on the first two of these factors but not on a state’s unemployment rate increase. The FMAP increase does not apply to Disproportionate Share Hospital (DSH) payments or non-Medicaid program costs like SCHIP and other Title IV programs whose matching rates are also based on FMAP.
[2] CBPP, ARRA State-by-State Estimates ($466.5 million for education and $103.8 million for other services). Federal Funds Information for States (FFIS), The American Recovery and Reinvestment Act Becomes Law, Budget Brief 09-04, February 23, 2009 (hereafter FFIS, ARRA Becomes Law), estimates $567.8 million ($464.5 million for education, plus $103.3 million for other services) to Oregon. CAP spreadsheet estimates $582.8 million. The State Fiscal Stabilization Fund provides $39.5 billion to states for education, $8.8 billion in “flexible” funds for other critical services and about $5 billion for incentive grants and other purposes, totaling $53.6 billion nationally. The $5 billion in incentive funding is included in the national total but not the Oregon estimate.
[3] Center for Law and Social Policy, Impact of American Recovery and Reinvestment Act (ARRA) of 2009 on Child Care and Development Block Grant (CCDBG) Funding, February 13, 2009, available at www.clasp.org/publications/aara_childcarestatealloc.pdf
[4] Center for Law and Social Policy, Impact of House Appropriations Committee Draft Proposal for the American Recovery and Reinvestment Bill of 2009 on CCDBG Discretionary Funding as of 01/16/09, January 16, 2009.
[5] Vicki Turetsky, How Much Restored Child Support Funding Will Each State Receive Under the American Recovery and Reinvestment Act? Center for Law and Social Policy, February 13, 2009, available at www.clasp.org/publications/statebystatematch021309.pdf.
[6] CAP spreadsheet.
[7] Arloc Sherman, Recovery Agreement Temporarily Expands Child Tax Credit for Large Numbers of Children in Every State, Center on Budget and Policy Priorities, February 12, 2009, available at www.cbpp.org/2-12-09tax.htm. Assumes income threshold is lowered from $12,550 to $3,000.
[8] CAP spreadsheet.
[9] FFIS, ARRA Becomes Law. Estimates Oregon’s share of $700 million for CDBG entitlement funds to be $6.1 million and of $300 million for CDBG non-entitlement funds to be $3.9 million.
[10] CAP spreadsheet. Shows total national investment of $4.6 billion, although the total for all states is higher at $4.64 billion. Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions Contained in the Conference Agreement for H.R. 1, the ‘American Recovery and Reinvestment Tax At of 2009,’ ” February 12, 2009, available at www.house.gov/jct/x-19-09.pdf, lists the cost at $4.663 billion.
[11] FFIS, ARRA Becomes Law. Funds provided through the McKinney-Vento Homeless Assistance Program.
[12] FFIS, ARRA Becomes Law. $50 million of the national total can be used for food distribution costs. The state figure represents Oregon’s share of the remaining $100 million.
[13] FFIS, ARRA Becomes Law.
[14] FFIS, ARRA Becomes Law. CAP spreadsheet estimates $39.3 million.
[15] FFIS, ARRA Becomes Law. The national amount includes $18.2 million in state grants, $87.5 for independent living centers and $34.3 million for programs for older people who are blind. State figure represents Oregon’s share of state grants only.
[16] CAP spreadsheet.
[17] Arloc Sherman, Tax Aid in Recovery Package Would Reach Large Numbers of Workers in Every State, Center on Budget and Policy Priorities, updated February 13, 2009, available at www.cbpp.org/1-21-09tax3.htm.
[18] U.S. Department of Education, “American Recovery and Reinvestment Act State Allocations,” updated February 19, 2009, available at www.ed.gov/about/overview/budget/statetables/recovery.html.
[19] FFIS, ARRA Becomes Law.
[20] CBPP, ARRA State-by-State Estimates.
[21] CBPP, ARRA State-by-State Estimates.
[22] CBPP, ARRA State-by-State Estimates.
[23] CAP spreadsheet.
[24] CBPP, ARRA State-by-State Estimates.
[25] CBPP, ARRA State-by-State Estimates.
[26] CBPP, ARRA State-by-State Estimates.
[27] FFIS, ARRA Becomes Law.
[28] CAP spreadsheet.
[29] National Employment Law Project (NELP), American Recovery and Reinvestment Act of 2009: Estimates of Jobless Workers Benefiting from Selected Unemployment Insurance Provisions, Final Package, February 13, 2009, available at www.nelp.org/page/-/UI/RecoveryPlanEstimates.pdf.
[30] CAP spreadsheet.
[31] NELP, American Recovery and Reinvestment Act of 2009: Final Package.
[32] CAP spreadsheet.
[33] FFIS, ARRA Becomes Law.
[34] FFIS, ARRA Becomes Law, estimates state Head Start funds only. $2.1 billion in national funding includes both Head Start ($1 billion) and Early Head Start ($1.1 billion).
[35] U.S. Department of Education, “American Recovery and Reinvestment Act (ARRA),” table of Department of Education additional funding, updated February 23, 2009, available at www.ed.gov/about/overview/budget/budget09/09recovery.pdf, lists $15.6 billion as discretionary funding and an additional $1.4 billion in mandatory Pell funding.
[36] CAP spreadsheet. Estimate shows Oregon’s share of discretionary Pell funding only.
[37] FFIS, ARRA Becomes Law.
[38] CBPP, ARRA State-by-State Estimates. FFIS, ARRA Becomes Law, estimates $125.4 million ($93.8 million in grants to local education agencies; $31.6 million for school improvement). CAP spreadsheet estimates $139.3 million.
[39] CBPP, ARRA State-by-State Estimates; figure does not include IDEA part C. FFIS spreadsheet estimates $137.7 million ($129 million for Part B, $4 million for Part B-preschool, and $4.7 million for Part C). CAP spreadsheet estimates $139.4 million for IDEA Part B.
[40] FFIS, ARRA Becomes Law.
[41] FFIS, ARRA Becomes Law.
[42] FFIS, ARRA Becomes Law.
[43] FFIS, ARRA Becomes Law. CAP spreadsheet estimates $41.9 million.
[44] FFIS, ARRA Becomes Law. State figures in FFIS document represent the maximum amount each is allowed under the ARRA’s new, higher payment caps. The total figure for all states shown in the document, $548,302,000, is unlikely to be the actual national outlay because all states are unlikely to utilize all available funds up to the maximum allowed. The national figure, $460 million in our table, is from Senate Finance Committee and House Ways and Means Committee, “American Recovery and Reinvestment Act of 2009: Full Summary of Provisions,” February 12, 2009, p. 16, available at finance.senate.gov/press/Bpress/2009press/prb021209.pdf.
[45] FFIS, ARRA Becomes Law.
[46] FFIS, ARRA Becomes Law. CAP spreadsheet estimates $27.7 million.
[47] CBPP, ARRA State-by-State Estimates. Funds provided through the Emergency Shelter Grant Program.
[48] CBPP, ARRA State-by-State Estimates.
[49] CAP spreadsheet.
[50] FFIS, ARRA Becomes Law; estimate is Oregon’s share of $3 billion provided through formula grants and does not include $1 billion to be awarded through competitive grants. CAP spreadsheet estimates $15.2 million.
[51] FFIS, ARRA Becomes Law.
[52] FFIS, ARRA Becomes Law. CAP spreadsheet estimates $29.2 million.
[53] FFIS, ARRA Becomes Law.
[54] FFIS, ARRA Becomes Law. National funding includes $6.9 billion for Transit Capital Assistance program, $0.75 billion for Fixed Guideway Infrastructure Investment program and $0.75 billion for Capital Investment Grants. FFIS state estimate considers Oregon’s share of Transit Capital Assistance funds ($74.591 million) and Fixed Guideway Infrastructure Investment funds ($1.126 million) only.
[55] FFIS, ARRA Becomes Law.
[56] FFIS, ARRA Becomes Law. ARRA funds a number of state and local law enforcement activities. Figures here include funding for the Byrne Justice Assistance Grant program only.
[57] FFIS, ARRA Becomes Law.
[58] FFIS, ARRA Becomes Law.
[59] Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions”; Senate Finance Committee and House Ways and Means Committee, “American Recovery and Reinvestment Act of 2009: Full Summary of Provisions,” p. 16.
[60] Senate Finance Committee and House Ways and Means Committee, “American Recovery and Reinvestment Act of 2009: Full Summary of Provisions,” p. 17. For a description of the regulations and estimates of the harm to Oregon if the regulations were to become effective, see Oregon Center for Public Policy, New Medicaid Regulations Will Reduce Federal Heath Care Dollars to Oregon, revised April 14, 2008, available at www.www.ocpp.org/cgi-bin/display.cgi?page=fact080229medica.
[61] American Recovery and Reinvestment Act of 2009, H.R. 1, 111th Cong., p. 332.
[62] U.S. House of Representatives, Committee on Appropriations, “Summary: American Recovery and Reinvestment as Passed by the House,” January 28, 2009, available at appropriations.house.gov/pdf/PressSummary01-28-09.pdf.
[63] Oregon Center for Public Policy, House, Not Senate, Economic Package Would Ease Health Care Squeeze for About 51,000 Unemployed, Low-Income Oregonians, issue brief, February 6, 2009, available at www.www.ocpp.org/2009/nr20090206UnemployedUninsured_fnl.pdf. See also Donna Cohen Ross, Matt Broaddus, and Edwin Park, Measure in House Recovery Package — but Not Senate Package — Would Help Unemployed Parents Receive Health Coverage, Center on Budget and Policy Priorities, February 9, 2008, available at www.cbpp.org/2-9-09health.htm.
