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Posted: June 01, 2009

Colorado’s share of the stimulus

The state is expected to receive more than $3.5 billion in funding, benefits and services

Carolyn McIntosh

President Obama signed the stimulus bill in February at the Denver Museum of Nature & Science, returning to the state where he accepted the Democratic nomination for president.

That Obama has borrowed the “New Energy Economy” phrase first championed by Gov. Bill Ritter and that Colorado supported Obama in the general election likely influenced the president’s decision to sign the bill into law here. But will this help direct stimulus funding to the state?

Colorado is expected to receive almost $3.5 billion in direct funding, benefits and services from the American Recovery and Reinvestment Act (excluding tax relief for individuals and businesses, certain federal appropriations or competitive grants). Including the federal agency funding to research labs and locations in Colorado, the state could receive more than $7 billion. 

For example, the National Renewable Energy Laboratory in Golden will receive $110 million in federal stimulus money for equipment and new facilities and could apply to the Department of Energy for an additional $83 million for wind-energy research.

Of the $3.5 billion in direct funding, the following are the largest categories of distributions for the state:
Education: nearly $760 million, with the potential for an additional $500 million based upon competitive grants. 
Medical: A variety of services will see increased funding totaling nearly $830 million.
Transportation: more than $500 million.
Energy: At least $175 million will support weatherization, energy efficiency grants and distributions through the State Energy Program, in addition to funding received by Colorado companies through separate applications and loan guarantees.
Broadband: Colorado will compete for its share of $7.2 billion in grant funding to improve our broadband infrastructure.
Rural areas: Farmers, ranchers and homebuyers will receive about $81.5 million.
Unemployment: All claimants eligible for and currently receiving unemployment benefits payments will receive expanded benefits.

Education

Over the next three school years, Colorado will receive approximately $760 million through the stimulus bill that will fill some of the budget shortfall from declining revenues and meet increasing demand for services in schools.

More than $621 million must be spent on K-12, post-secondary or early childhood education. The remaining $138 million is allocated for budget stabilization and discretionary spending. Competitive grants worth $4.35 billion are expected to be divided among about 12 states that demonstrate significant reforms in K-12 education. Colorado could receive up to $500 million, but with applications due in October, awards will not be made until 2010. Funding is available for everything from Headstart programs, school lunches, technology improvements, to college tuition tax credits.

Health care

The stimulus bill included substantial funding increases for a broad spectrum of health-care services for total medical services funding of nearly $840 million. For 2009 and 2010, Colorado hospitals providing indigent care will receive increased payments of approximately $7.5 million.

Over the next three years, Colorado residents will receive additional Medicaid Medical Assistance Payments estimated to top nearly $800 million. 

Colorado also will receive nearly $1.3 million to provide meals to older adults in Colorado and an additional $2.5 million for county implemented supplemental nutrition programs.

For the years 2009 and 2010 Colorado will receive $5 million for domestic violence prevention programs. Colorado Early Intervention programs for children will have nearly $7 million in increased funding. The Division of Vocational Rehabilitation will receive an estimated $7.3 million designated for Vocational Rehabilitation State Grants, nearly $500,000 for services for blind or visually impaired older adults, and $243,000 for independent living programs. 

The state will also receive $800,000 to recruit and retain health professionals in medically underserved Colorado communities by paying for a portion of their student loan debt in exchange for a two-year contract with the state, in combination with an additional $6 million administered by National Health Service Corps for the benefit of these same health professionals.

Transportation

Of the $500 million in transportation funding that Colorado will receive, the Colorado Department of Transportation will distribute the bulk of it — approximately $330 million in federal highway funding and another $12.5 million in funding for transit projects in rural areas. An additional $90.2 million will be distributed to the Regional Transportation District, Mesa County, and the cities of Colorado Springs, Greeley, Fort Collins and Pueblo. 

Additional distributions will be made directly to transit agencies and the three largest regional transportation planning organizations in the state: Denver Regional (including the cities and counties in Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Gilpin and Jefferson counties), Pikes Peak (including the cities and counties in El Paso, Park and Teller counties), and Northern Front Range (including the cities and counties in Larimer and Weld counties).

Of these transportation funds, $137.3 million was already obligated by April 29 and $141.4 million must be allocated by the end of June.

Renewable energy and energy efficiency

One of the most significant areas of investment in the stimulus bill is promoting clean energy development and energy efficiency programs. While $175 million of that funding has been quantified for direct funding to Colorado, it is anticipated that Colorado companies will seek and be awarded funding leading to a substantially greater distribution of this category of funding within Colorado. 

The state’s direct funding includes: $80 million for weatherization programs; $50 million for the State Energy Program; and $45 million in energy efficiency block grants. Other energy-related funding will be distributed for research and development by competitive bid and the Department of Energy Loan guarantee program.

Stimulus funding through 2011 will expand residential weatherization services for Colorado’s low-income residents. The state has not determined how it will allocate the $50 million targeted for the State Energy Program, nor has it identified mechanisms for distribution, but it was scheduled to submit a final plan in mid-May for Department of Energy approval. Plan approval is expected by July.

In general terms, State Energy Program funding will be targeted at: 1) direct and immediate investment in businesses and training programs for job retention and creation; 2) investment in business development; and 3) investment in reducing barriers to enable widespread adoption and access to efficiency and renewable resources.

These goals will be achieved through training in the renewable energy service sector, developing a database of available services, access to capital through direct debt funding, revolving loans, seed money, and grant funding, and access to information through Web-enabled services, a telephone hotline, and consumer outreach programs.

The Governor’s Energy Office will administer the funds, and all solicitations will be announced to its newsletter list when the plan has been approved by the Department of Energy.

The $45 million in Energy Efficiency and Conservation Block Grants will be distributed by Colorado’s cities and counties as well as the state.  The purpose of the grants is to reduce fossil fuel emissions in an environmentally sustainable way, maximize benefits for local and regional communities, reduce total energy use and improve energy efficiency. 

The state will distribute about half of the money to provide energy efficiency services to local communities, including code training, assistance with establishing local building standards and local incentive-based programs for homeowners and businesses. The state expects approval of its distribution plan by Aug. 1, after which the Governor’s Energy Office will announce funding solicitations.

Colorado cities and counties will issue the remainder of the funding. Denver will manage $6 million for energy efficiency block grants; Colorado Springs will distribute $3.6 million; Aurora has $2.8 million; and Jefferson and El Paso counties will distribute $2.2 million and $1.9 million, respectively.

Other energy-related stimulus bill funding will be administered by federal agencies, primarily the Department of Energy. The Governor’s Energy Office, however, will identify and coordinate opportunities for investment in Colorado through the Renewable Energy Development Infrastructure project.

Additionally, Colorado’s renewable energy sector is expected to secure substantially more research and development funding, loan guarantees and grant awards by competitive bids.

Broadband

The stimulus bill includes $7.2 billion for broadband deployment including service expansion, infrastructure construction and job creation. Gov. Ritter hosted statewide broadband summits in 2007 and 2008 to develop consensus on broadband needs, but Colorado has not yet formulated a plan it can use to apply for funding. 

Colorado is home to nationally significant information technology and communications companies, so the state is well-situated for substantial funding in this category.

Agriculture

The U.S. Department of Agriculture will administer approximately $81.5 million in rural area funding to support farmers, ranchers and homebuyers. Funding will include operating loans to farmers and ranchers, single-family housing loans to rural residents, and infrastructure support. 

Unemployment

For those hardest hit by the recession, the stimulus plan includes several unemployment benefit program expansions totaling nearly $4 million. Re-employment training programs will see nearly $4 million in increased funding.

Unemployment benefits will increase nearly $500 million over the next two years. 

All claimants eligible for and currently receiving regular unemployment insurance and emergency compensation benefits will receive an additional $25 a week.

The first payment of the additional $25 a week will be included on a back payment basis for payments starting Feb. 28, 2009. Payments of the additional $25 a week will end on July 3, 2010. The stimulus plan also extends benefit eligibility for an additional 13 weeks. 

The state Department of Labor and Employment will administer employment and training programs to help Coloradans acquire new skills and get back to work through Workforce Investment Act funding of approximately $32 million.

Conclusions

Colorado will receive at least $3.5 billion and perhaps as much as $7 billion in stimulus funding. In addition, due to the presence of the National Renewable Energy Laboratory, the focus and strength of our college and universities, and the emphasis on conventional and renewable energy development by both public and private entities, Colorado is well positioned to receive even more funding than outlined in this article.

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Carolyn McIntosh is partner in the law firm of Patton Boggs, where she specializes in energy and natural resources. She serves on the board of directors of CORE Colorado (Connected Organizations for a Responsible Economy).

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