Overview of the Recovery Act in Tennessee Mike Morrow, July 1, 2009

Overview of theRecovery Act in Tennessee

Mike Morrow, July 1, 2009

“I am proud of Tennessee's reputation for good government, and I want and expect us to be a model for other states in how we handle Recovery Act money sensibly – turning square corners, and with every nook and cranny of what we do and what we spend well-lighted and visible to the public.”

– Governor Phil Bredesen

American Recovery and Reinvestment Act of 2009Speed economic recovery ▪ Create and save jobs ▪ Provide needed services to Tennesseans

Recovery Act Purpose

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The American Recovery and Reinvestment Act of 2009 (ARRA) will:– Create and retain jobs

– Invest in the economy to speed recovery

– Build a foundation for long-term economic growth


Recovery Act Priorities

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Modernize America’s infrastructure Enhance our energy independence Expand educational opportunities Increase access to medical care Provide tax relief Protect those in greatest need

Dispersed by an array of methods:– Tax changes– Individual assistance– Formula grants– Discretionary competitive grants

Distributed via federal, state and local governments as well as nonprofit and community organizations

Rapid implementation required to put funds to work as quickly as possible


Recovery Act Funds

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Tax Changes

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Making Work Pay Credit for 2009 and 2010» $400 for individual filers

» $800 for joint filers

Full credit provided up to incomes of:– $75,000 per year for individuals

– $150,000 per year for married couples

Impact on take home pay, on average:– $33 more per month for individuals

– $65 more per month for families


Tax Changes

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First-time home buyer tax credit» Up to $8,000 for purchases Jan. 1 – Dec. 1, 2009

» No payback requirement

» Equal to 10 percent of the home’s purchase price up to the maximumof $8,000

Money Back for New Vehicle Purchases» Taxpayers can deduct state and local sales taxes on certain new vehicles

bought in 2009


Tax Changes

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Earned Income Tax Credit (Tax Years 2009 and 2010)

» Temporary increase in the EITC for taxpayers with 3 or more qualifying children

Additional Child Tax Credit » Lowers the minimum earned income amount used to calculate the credit so

more taxpayers qualify and increases the amount of the payments they may receive

American Opportunity Credit (Tax Years 2009 and 2010)

» More parents and students will qualify for help paying college expenses

» Adds required course materials to list of qualifying expenses

» Allows the credit to be claimed for four post-secondary education years instead of two


Individual Assistance

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Food Stamps Program» 13% automatic monthly increase

Social Security and Supplemental Security Income (SSI)» $250 one-time payment to more than 50 million individuals

Unemployment Insurance» $25 per week increase in benefits

COBRA» 65% subsidy of COBRA premiums for eligible individuals

Higher Ed Financial Assistance» Increases Pell Grant maximum award for eligible students from

$4,850 to $5,350

» Creates new work-study opportunities for low- to moderate-income students


Formula Grants

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Formula grants may flow through organizations to benefit individuals:

Nutrition for Seniors» Approximately 14 million meals delivered to homes and senior centers

across the U.S. through programs like Meals on Wheels

Access to Health Care» Funds for 126 new community health centers across the U.S.

Low Income Weatherization» Assistance to low income families in weatherizing and improving the

energy efficiency of their homes

Jobs and Training» Summer jobs for youth» Training and employment for dislocated and low-income adults» Community service employment for older Americans


Formula Grants

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Formula grants for education:Fiscal Stabilization Funds» Delays or prevents cuts for pre-K programs, public schools and public

institutions of higher education

K-12 Education» Title I grants for basic school expenditures and technical assistance to

schools

» Individuals with Disabilities – special education, pre-school and early intervention

» Education Technology


Formula Grants

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Formula grants for energy independence:Energy Efficiency and Conservation Block Grants» To develop local energy plans and energy assessments

» Other programs and activities that result in long-term energy savings and provide jobs

State Energy Programs» Funding to states to construct and carry out their own renewable

energy and energy efficiency programs


Formula Grants

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Formula grants for transportation:Roads» Repair and build highways, roads and bridges

Transit» Repair and build America’s public transportation infrastructure

Aviation» Airport construction projects and investments in the air traffic control

infrastructure


Formula Grants

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Formula grants for the environment:Clean Water» Water quality protection projects for wastewater treatment,

storm water runoff pollution control and watershed management

Drinking Water» Drinking water infrastructure, including new treatment facilities and

improvements to prevent contamination due to aging infrastructure

Underground Storage Tanks» Clean up sites with petroleum leaks from underground tanks and properly

close sites abandoned by their owners

Clean Diesel» Projects to reduce diesel emissions


Formula Grants

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Formula grants for justice assistance:Byrne Justice Assistance Grant Program» To prevent, fight and prosecute crime

Crime Victims Assistance and Compensation» Support state compensation and assistance programs

Internet Crimes Against Children» Enhance investigative response to predators using the Internet or other

technology to sexually exploit children

Violence Against Women» Transitional housing assistance for victims


Formula Grants

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Formula grants for homeless individuals:

Education for the Homeless» To meet the special needs of students who are homeless

FEMA Emergency Food and Shelter» Provided to agencies and non-profit organizations to provide food

and shelter homeless individuals

Homelessness Prevention (THDA)» Financial assistance and services to prevent individuals and families from

becoming homeless or to help those who are to be quickly re-housed and stabilized

» Additional grants for these services provided directly to local governments in Tennessee’s four largest urban areas


Competitive Grants

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Funding available nationally on a competitive basis in education, research and technology:

» $8.2 billion National Institutes of Health research grants

» $2 billion Health information technology

» $1.1 billion Early Head Start for low income families

» $100 million Teacher quality enhancement

» $57 million Autism study

» $15 million Preservation of historic structures on campuses of historically black colleges and universities


Competitive Grants

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Funding available nationally on a competitive basis in training and national service:

» $750 million Training and job placement in high growth and emerging industries – renewable energy, health care

» $200 million Dislocated worker assistance for people in job training in areas of high unemployment or poverty

» $50 million YouthBuild program to help at-risk youth gain credentials as they build or rehab affordable housing

» $39.2 million Organizations that host AmeriCorps programs


Competitive Grants

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Funding available nationally on a competitive basis in energy and natural resources:

» $20 billion Renewable energy study and research

» $4.5 billion Smart grid investments to modernize the nation’s electricity grid and make it more efficient and reliable

» $400 million Energy efficiency improvements to reduce carbon emissions

» $400 million Electric vehicle infrastructure for states


Competitive Grants

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Funding available nationally on a competitive basis in criminal justice:

» $1 billion COPS grants to support hiring of career law enforcement officers

» $225 million Byrne grants to support crime prevention, improve administration of justice and provide services to crime victims

» $125 million Rural law enforcement to combat drug related crime

» $43 million Housing and support services for victims of domestic violence, sexual assault or stalking


Competitive Grants

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Funding available nationally on a competitive basis in infrastructure and economic development:

» $7.2 billion Broadband deployment and infrastructure in rural, unserved and underserved areas

» $2 billion Purchase and rehab vacant foreclosed properties and create affordable housing to stabilize neighborhoods

» $150 million To assist urban and rural communities with severe economic dislocation and job loss due to corporate restructuring

» $20 million Small and emerging business enterprise grants for rural distance learning networks and adult education


Accountability

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Unprecedented provisions for transparency and accountability

Mandatory provisions to identify and prevent fraud, waste and mismanagement

Detailed spending information at and www.staterecovery.org

http://www.staterecovery.org/


Tennessee’s Online Resource

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» News and updates

» Documents and reports

» Frequently asked questions

» Links to state and federal agency recovery Web sites

www.TNRecovery.gov

http://www.tnrecovery.gov/


The Road to Recovery

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» Speed economic recovery» Create and save jobs» Provide needed services to

Tennesseans

The American Recovery and Reinvestment Act of 2009

The Road to Recovery