News

State in line for $50.7 billion in federal money

The flow of federal economic-recovery money into California is likely to total $50.7 billion, or even more, according to an analysis by a non-profit group that tracks government spending.

The California Budget Project study seeks to identify specific amounts of money that California is due to receive, including as much as $15 billion dollars specifically aimed at easing the pain of the state's budget deficit.

The money is part of the $787 billion economic stimulus package that President Obama signed to help states cope with the deepening recession.

The impact of at least some of that money on the state's General Fund – the state's main coffer of business and personal income tax revenues – is uncertain. But the dollar level is important, because if $10 billion or more goes to the General Fund, a new round of cuts and tax increases will be triggered. The impact level is scheduled to be decided by the state treasurer and the Schwarzenegger administration's top finance official. The two have scheduled a March 17 hearing.

"With respect to the trigger, this is a decision that will be made over the next three weeks," said Jean Ross, executive director of the CBP. "We believe there is plenty of room to creatively use those federal funds. This is critically important."

According to  Ross' group, California will receive about $6 billion in education block grants, $400 million in increased assistance for needy families and nearly $160 million for foster care and adoption services.

The largest single dollar item was identified as the refundable income tax credit of up to $400 per worker for 2009 and 2010. The Budget Project's analysis put the dollar impact on California at $13.1 billion, noting that it would affect 2.3 million.

The state will also get nearly $1.4 billion that includes a one-time payment of $250 this year to people receive Social Security,

Supplemental Security Income, veterans' disability compensation or pension benefits, among other things. The funds affect about 5.5 million Californians.

Other major funding packages include $1.5 billion for increased food stamps for 2.5 million low-income people, $838.7 million for unemployment insurance benefits and $1.8 billion by expanding eligibility for the child income tax credit.

The California Budget Project assesses the impact of state fiscal decisions on the poor, the disabled and the elderly, and on the state's quality of life.


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