UPDATE ON THE FEDERAL STIMULUS PACKAGE

Many city officials have questions about what the American Recovery and Reinvestment Act means for Texas cities. In coordination with the National League of Cities, the Texas Municipal League is closely monitoring the implementation of the bill, but details are sketchy at best.

The Texas House of Representatives has created a committee, the Select Committee on Federal Economic Stabilization Funding, to monitor the Act’s implementation in Texas. The committee met for the first time last week, and the first meeting showed that state agencies and legislators have precious little information on how money will actually flow to the state (or to Texas cities).

The committee chairman, Jim Dunnam (D – Waco), indicated at the meeting that a major part of the committee’s role is ensuring that cities know what funds may be available.

According to documents obtained from the committee, it appears that the majority of the stimulus funds will be spent on tax cuts and social services programs. However, the following stimulus programs may be of particular interest to cities:

  • Transportation – Over $2 billion for state, local, and federal highway and bridge construction projects and certain other uses. According to the Texas Department of Transportation (TxDOT) representatives who have provided testimony to the House Select Committee on Federal Economic Stabilization Funding, cities will be reimbursed for the amount spent on programs approved pursuant the Act. An additional $1.5 billion in discretionary transportation funds will be made available to local communities nationwide, but the U.S. Department of Transportation has not yet adopted rules for the allocation of these funds.
  • Transit Programs - $372 million for urban and rural capital transit. (To be allocated according to existing Federal Transit Administration formulas.)
  • Byrne Justice Assistance Grants - $140 million for law enforcement efforts to fight crime. (To be allocated 60 percent to the state and 40 percent directly to local entities.)
  • The Act includes $13.61 billion for projects and programs administered by the Department of Housing and Urban Development (HUD). Texas should receive approximately $517 million of these funds. Nearly 75 percent of the funds were allocated to state and local recipients on February 25, 2009. Those programs include the following: (1) Community Development Block Grants; (2) Project-Based Rental Assistance; (3) Lead Hazard Reduction/Healthy Homes; (4) Homelessness Prevention Fund; (5) Tax Credit Assistance Program; (6) Native American Housing Block Grant; and (7) Public Housing Capital Fund. The allocations for each program can be viewed at www.hud.gov/recovery. The remaining 25 percent of funds will be awarded by competition in the coming months.
  • Weatherization Assistance Program - $236 million for the Weatherization Assistance Program through the Texas Department of Housing and Community Affairs (TDHCA.)
  • HOME Program - $148 million for increasing the supply of affordable housing through TDHCA.
  • Clean Water State Revolving Fund - $181 million for the state to capitalize its low-interest loan programs for water projects and stormwater/non-point source pollution control projects.
  • Safe Drinking Water State Revolving Fund - $164 million for the state to capitalize its low-interest loan programs for drinking water infrastructure improvements.
  • On February 25, 2009, TxDOT released a list of projects that could be developed using $1.2 billion in funds available to the state under the Act, as well as an additional list of maintenance and preservation projects that would represent approximately $500 million in stimulus money. Project lists and more information are available on the TxDOT website, www.txdot.gov (keyword: stimulus). Citizens may comment on TxDOT’s proposal to implement the Act through the Web site, by fax (512-463-9896), by email (askTxDOT@dot.state.tx.us) or by writing to the department (125 East 11th Street, Austin, Texas 78701).

The numbers above are estimates provided by the Texas legislative budget board and HUD, and have not been independently verified. It is unclear at this time what action cities should take to ensure a chance at any available funds that may be competitively awarded.

The National League of Cities (NLC) has invited any city official (including non-NLC members) to view an online Web cast about the Act. The Web cast gives an overview of the Act and provides access to the most current information held by NLC. To view the Web cast and accompanying materials, please go to www.nlctv.org. Click on the “02/25/06” program entitled “National League of Cities – The Federal Recovery Package: What’s In It for Cities and How to Access the Resources.” You will be asked to register, but doing so is free.

TML will provide more information as it comes available.

TML member cities may use the material herein for any purpose.
No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the
Texas Municipal League.

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