President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA), the stimulus bill, on February 17, 2009. It is intended to jumpstart the nation’s economy, create or save jobs, and address other economic challenges. We discuss the most promising programs for rural communities and farmers and ranchers in this article.

Note that the status of these programs will change from time to time. Departments are required to report their progress, some as often as weekly.

You can follow the federal programs of your interest as well as the progress and status of nearly every state (at the time of print, all states except North Dakota have recovery websites) at www.recovery.gov. This website will also give you up-to-date information on the department of most interest to you.

The Department of Agriculture

The United States Department of Agriculture (USDA) was appropriated $28 billion through the stimulus bill. USDA has already begun to distribute their appropriated funds. Programs receiving funds are expected to generate jobs and stimulate local economies through expanding opportunities for broadband to rural communities, assisting low-income families through food programs and housing assistance, funding existing and new water and waste facility projects, and protecting and conserving the nation’s forests and farm land.

The Department of Education

The Department of Education will release $100 billion in stimulus funding to states and local education associations. The bill designated staving off teacher layoffs as the immediate priority in the first round of funding.

The stimulus bill identifies four principles guiding use of education stimulus funds:

• Spend funds quickly to save and create jobs.
• Improve student achievement through school improvement and reform, including these four specific areas:

Making progress toward rigorous college and career-ready standards and high-quality assessments for students, including English Language Learners and students with disabilities.
Establishing pre-K to college and career data systems that track progress and foster continuous improvement.
Making improvements in teacher effectiveness and equitable distribution of qualified teachers.
Providing intensive support and effective interventions for the lowest performing schools.

• Ensure transparency, reporting and accountability (including more rigorous reporting requirements than normally apply to federal education programs).
• Invest one-time stimulus funds thoughtfully to minimize funding issues for schools after the stimulus funds are no longer available.

While this money is helpful to schools of all sizes, it is difficult to say what kind of impact this may have. This money may act as a shot in the arm, but once the money has been spent, it is an open question as to how many schools will be able to continue programs that are funded with the stimulus money.

Click table to view a larger version of the table above.

The Department of Transportation

The stimulus funding appropriated to the Department of Transportation will, for the most part, be distributed through grants. These grants will be awarded to states through a formula set in current highway authorization law, the Surface Transportation Program (STP). In most cases, no match is required, but there is a “use it or lose it” provision and time limits for spending plus a number of transparency reporting requirements.

State highway departments have already identified more than 100 transportation projects across the country, totaling more than $750 million, where construction can start within the month. That number is expected to grow substantially as more states submit certifications and begin to receive project approvals. The projects will be web-posted for the public to see with information on projects accessible at www.recovery.gov.

The Department of Energy

The Department of Energy is allocated $40 billion, for the development of renewable energy. A total of $16.8 billion is allocated to renewable energy and energy efficiency uses. Most of the uses relate to the Energy Efficiency and Conservation Block Grant program in the Energy Independence and Security Act of 2007.

Of course, it is somewhat complicated to track: $2.8 billion is to be distributed through a formula contained in the Energy Independence and Security Act of 2007 – 68 percent to local units of government, 28 percent to states, 2 percent to tribes, and 2 percent to competitive grants. Rural communities are not generally included under the definitions of local units of government. These are cities of at least 35,000 and counties of at least 200,000.

However, there is a provision in the underlying law that 60 percent of the state allocations of the Energy Efficiency and Conservation Block Grant program go to local units of government not eligible for direct grants from the Department of Energy – in other words, to rural communities and cities less than 35,000.

The Weatherization Assistance Program receives $5 billion, which allows an average investment of up to $6,500 per home in energy efficiency upgrades and will be available for families making up to 200 percent of the federal poverty level – or about $44,000 a year for a family of four ($55,140 for Alaska and $50,720 for Hawaii).

At a time when economies are hurting, rural communities stand to suffer a great deal. Losing businesses that tend to provide a majority of the jobs in a community has the potential to devastate a community. Small businesses have always been a major part of the economy in small towns. Assisting those businesses is a good strategy for the American Recovery and Reinvestment Act. Small communities looking for development would do well to partner together to find opportunities for funding as well as requests for funds.

This information was covered in the latest issue of the Center for Rural Affairs’ Rural Brief, which is available to receive in print or electronically by calling 402.687.2100 or info@cfra.org.

Contact: Kim Preston, kimp@cfra.org or 402.687.2103 x 1022 for more information.