American Recovery and Reinvestment Act of 2009
What’s in it for New Jersey?

Corporate & Finance Alert
(Cheryl A. Gorman)
March 3, 2009

State and local governments stand to benefit fairly significantly from the Obama stimulus package, the American Recovery and Reinvestment Act of 2009 (the “Act”). This urgently needed federal legislation is intended to create and protect 3.5 million jobs for American workers in an effort to put the nation’s economy back on track. According to the White House, as many as 100,000 of those jobs will be in New Jersey. Governor Corzine’s office expects to receive about $850 million from the stimulus package that can be used to shore up the budget for fiscal 2009, which begins in July 1, 2009. New Jersey expects to receive dollars in the following areas to get people in New Jersey working and on the road to economic recovery.

Infrastructure and Science. New Jerseyans will be put to work rebuilding crumbling roads and bridges and enable creation of a more efficient cyber infrastructure for future generations. The following benefits are estimated for New Jersey.

• $651.8 million in Highway Funding for highways and bridges. This money could also be used for rail and port infrastructure at the state’s discretion
• $524.2 million in Transit Formula Funding for investments in mass transit
• $162.6 million for Clean Water State Revolving Fund to address the backlog of clean-water infrastructure needs
• $104.7 million from Public Housing Capital Fund to fund capital projects at public housing projects
• $60.8 million in HOME Funding to build affordable housing and provide rental assistance for poor families
• $43.5 million from Drinking Water State Revolving Fund to address the backlog of drinking water infrastructure needs
• $41.1 million from Homelessness Prevention Fund to be used for short- or medium-term rental assistance, first and last month’s rental payment or utility payments

Education and Training in New Jersey. Critical to Americas ability to compete in the 21st century is training and educating a work force to meet the challenge of global competition. The following benefits are estimated for New Jersey.

• $1.1 billion in State Fiscal Stabilization Fund in aid to avert layoffs in public schools and modernize schools and college buildings
• $361.5 million for Special Education Part B State Grants to help improve educational outcomes for individuals with disabilities, raising the federal contribution for special education to roughly 40%
• $253.3 million in Title I Education for the Disadvantaged to provide funding for poor school districts
• $26.5 million in Dislocated Workers State Grants, particularly training and grants aimed at addressing shortages of skilled workers
• $21 million for Department of Labor Youth State Grants
• $12.7 million in education technology funds to purchase modern computers and software and provide professional development to ensure the technology is used effectively in the classroom
• $10.8 million in State Employment Service Grants to match unemployed individuals to jobs
• $9.5 million for DOL’s Adult State Grants program
• $9.5 million for vocational rehabilitation to help individuals with disabilities to prepare for and sustain employment

New Jersey’s Energy. The Act promotes the development of clean, efficient American energy, such as modernizing energy transmission and developing renewable energy technologies.

• $121.9 million from Weatherization Assistance Program for low-income families
• $74.8 million from State Energy Program funding energy efficiency projects for cities, towns and counties

Protecting the Vulnerable in New Jersey. The Act proposes spending to ease the current recession’s devastating effects on children, the poor and others who struggle to obtain basic necessities, such as food and shelter. The following benefits are estimated for New Jersey.

• $296.5 million in Supplemental Nutrition Assistance Program (SNAP) benefits (formerly food stamp program)
• $34.1 million in Child Care and Development Block Grants to provide quality child-care services for low-income families
• $27.6 million in Community Services Block Grants to local agencies for services to low-income families
• $12.8 million for Head Start expansion of programs
• $2.8 million for Emergency Food and Shelter Program, providing grants to local nonprofit groups providing emergency food and shelter for the homeless
• $2.2 million for Senior Meals Programs
• $2.2 million for the Emergency Food Assistance Program
• $2 million for National School Lunch Program Equipment Assistance

Law Enforcement in New Jersey. State and local law enforcement agencies have not been exempt for job losses and program cuts. Communities can not afford the devastating effects of increased crime, loss in property values and business closings. The following benefits are estimated for New Jersey.

• $49 million in Byrne/JAG grants to support law enforcement efforts, such as drug courts and gang prevention
• $4.6 million in Violence Against Women Grants to help victims in need of housing assistance and other support services
• $986,810 in Internet Crimes Against Children Grants to help law enforcement improve investigations into Internet users seeking to sexually exploit children

Extended Unemployment Insurance for New Jersey. Perhaps the most controversial benefit provided in the Act is the additional unemployment insurance benefits offered to those that have lost their jobs in this recession. The Department of Labor estimates that New Jersey could receive $208.1 million in new Unemployment Insurance funding, if New Jersey enacts the Unemployment Insurance modernization incentives that the legislation would provide.

Should you have any questions regarding your own situation, please contact Cheryl A. Gorman of our Corporate Department.