How the latest stimulus bill affects N.C.
Posted February 14, 2009 6:34 p.m. EST
Updated March 9, 2009 5:12 p.m. EDT
Raleigh, N.C. — North Carolina is expecting to receive $6.1 billion from the $787 billion federal stimulus package, with the biggest chunk – about $2.35 billion through 2011 – helping the state to provide Medicaid health insurance for low-income residents, according to preliminary figures compiled before the bill passed Congress Friday.
Second District Congressman Bob Etheridge said the money will also save or create jobs across the country.
“We're hurting (and) this will turn it around. We're looking to creating or save 3.5 million or 4 million jobs ... You've got to put people back to work,” Etheridge said.
Of those jobs, 105,000 would be in the state, Etheridge added.
North Carolina's share of the stimulus plan includes about $1.2 billion for state education programs and $253 million that can be used more flexibly to stabilize the state's looming budget gap. More than half of North Carolina's annual budget is spent on education, from public school kindergarten through the university system.
The combined $1.43 billion over two years in the compromise was less than the $1.8 billion that the state would have received under the version the U.S. House approved last month. Gov. Beverly Perdue had anticipated more than $900 million in federal aid to help narrow a gap in the current year's state budget of about $2 billion. She said there will be cuts from current spending despite federal help.
The federal Medicaid infusion, spread over 27 months, may help stave off budget cuts that might have forced layoffs, Rep. Jim Crawford, D-Granville said. The state's Medicaid spending was forecast to cost nearly $3 billion of North Carolina's $21 billion budget for the year ending in June. The increased federal spending on Medicaid means the state will be able to divert $720 million in state funds to other uses between now and June, said Canaan Huie, finance counsel to state House Speaker Joe Hackney, D-Orange.
The stimulus plan includes another $339 million to bolster North Carolina schools that have concentrations of poor children, plus $334 million for special education and $17 million for Head Start.
"The critical piece is the school construction. If we're going to come out of this recession stronger than we were when we went in it, we're going to do it by having infrastructure, roads, bridges – but more importantly we'll have schools," Etheridge said.
For the average North Carolinian, Etheridge said 3.1 million people will get a tax cut.
“We can't afford not to do something to get this economy back on track,” Etheridge said.
The infrastructure spending seen as pumping money into delayed construction projects includes $776 million for replacing and repairing the state's highways and bridges, $131 million for mass transit, $66 million for drinking water treatment, $72 million for sewers, and $113 million for making homes more energy efficient.
The federal stimulus passed the U.S. House Friday, with Rep. Heath Shuler, D-N.C., one of only seven Democratic lawmakers to vote against it. The Senate passed the measure Friday night.
President Barack Obama could sign the measure as early as Monday.