Central Valley

$31 billion in stimulus funds not enough for state

SACRAMENTO -- California won't get enough federal stimulus money to avoid higher taxes and spending cuts, the state's fiscal watchdog estimated Tuesday.

Of the $31 billion the state is expected to receive, Legislative Analyst Mac Taylor projects nearly $8 billion can be used for budget relief. That's $2 billion short of what is needed to forestall about $1 billion in state spending cuts and reduce by half a new 0.25% increase in personal income tax rates.

But Taylor cautioned that his estimate is not the final word on whether the state will hit the $10 billion threshold that lawmakers established as the trigger in the recent deal to close the state's budget gap.

"There are many different interpretations," Taylor told lawmakers at a hearing Tuesday. State finance and treasury officials will make an official determination later this month.

Indeed, state and local officials are still sorting through much of the $787 billion federal package. California will get the estimated $31 billion through 2011, plus billions more in competitive grants, according to the Legislative Analyst's report.

Here's a look at how the $31 billion might flow to the state and Valley:

Transportation

The state gets $3.6 billion for roads, highways and transit -- and a lot of the money must be spent soon.

Planners of a statewide bullet train think they can snare up to $3 billion of $8 billion available nationwide for high-speed rail. California's train would run through the Valley. But competition will be fierce, with officials from the East Coast, Midwest and other regions pursuing the dollars.

State voters approved a $9.9 billion bond for the California train, but the money has been slow to get out the door because of the state's cash-flow problems.

More delays could make it harder to win federal money, planners fear.

Education

California schools will get nearly $8 billion in state-administered funding, plus more in grants. Nearly $5 billion is meant to stave off cuts. Most of the remaining money is for schools with low-income students and for special education programs.

California college and university students will have access to $500 million more in Pell grants, which offset education costs for low-income residents. Also, students will get bigger tax credits, possibly even refunds, for college costs.

Officials at California State University, Fresno, are interested in applying for some of the hundreds of millions of dollars for scientific research. The university is active in water and agriculture research.

Health

The state's health programs will get about $9 billion. Most of the money will come in the form of the federal government picking up a greater share of the state's Medi-Cal bill. However, to get the money, the state must rescind a new rule requiring that children report twice a year on their Medi-Cal eligibility.

Valley hospitals could benefit from a $54 million boost in payments to hospitals in the state that serve low-income patients. There's also money for upgrades to public health centers and for health work-force training.

Also, Valley towns -- which are plagued by water issues -- are likely to be in the running for some of $160 million for safe drinking water projects.

Labor

The state will get nearly $500 million for jobs programs.

The state's unemployment insurance program will get a boost. Recipients will get an extra $25 in weekly benefits. And more workers are eligible for 33 additional weeks of benefit payments on top of the normal 26 weeks.

Social Services

The stimulus package pumps $5.3 billion into programs for low-income, disabled and elderly residents in California. Supplemental Security Income program recipients will get a one-time payment of $250.

More money also is on the way for food stamps, CalWORKS, foster care and child support.

Environment

Nearly $600 million will be spent on water infrastructure upgrades, renewable energy, air quality, flood control and more.

Valley cities might get some of $283 million for wastewater upgrades. Also, nearly $1 million is set aside for road and trail maintenance in the Sierra National Forest in Fresno, Madera and Mariposa counties.

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