Guidelines
Look to the Future
· Maximize economic impact
. This is an opportunity to invest in the state’s people which will expand the tax base and tax revenues to improve the state’s long-term fiscal health. Every decision should be guided by the need to foster long-term economic prosperity for vulnerable children and families.
· Plan ahead
.
Develop a plan to use the funds over the three fiscal years 2009, 2010 and 2011, recognizing that certain funding must be expended within a specified time frame
. Avoid creating “cliffs” or the sudden elimination of supports for families that can plunge them into poverty.
·
Use one-time funds for one-time needs.
To avoid budget cuts or having to use state resources when the federal funds run out, use one-time resources to meet temporary needs or make one-time investments. These may be improvements in infrastructure, such as upgrading early childhood program facilities, expanding workforce development training to get people back into jobs, or funding to meet temporary increases in demand, such as surges in welfare and Medicaid caseloads.
Build Human and Physical Capital
·
Invest in people .
The best way to stimulate long-term productivity is to maximize investment in human capital formation. This investment can take many forms, including expanding child care so that people can better access training opportunities and employment, expanding job training programs for low-income individuals focusing on employment sectors that need skilled workers and taking advantage of youth workforce development opportunities.
·
Strengthen communities .
When people encounter hard times, they seek help from their communities. States can help provide s communities with resources to meet increased need. This can include providing nutritious food, access to timely and preventative health care. income subsidies to the unemployed, investment in housing stock, and funding for recreational and educational programming.
Relieve Severe Hardship
·
Increase access to safety net benefits .
This helps families cope with the recession and also stimulates economic activity in struggling communities because low-income families will spend the benefits quickly. The economic recovery legislation provides temporary increases in food stamp benefits, unemployment insurance benefits, and SSI benefits. It also temporarily creates a new Making Work Pay credit and expands the EITC and Child Tax Credit. States should actively promote access to these resources, which are paid for either with federal funds or a dedicated fund from employer taxes, and thus do not rely on state funds. The act also includes additional funding for child care, Head Start, and TANF, so states can expend these funds to meet rising needs.
·
Modernize unemployment insurance and WIC;
expand school lunch programs. The stimulus package offers states the financial resources to make changes to these essential programs and provide more assistance to struggling families.
Invest In Infrastructure with Employment in Mind
·
Use fiscal relief to
create jobs
.
The Fiscal Stabilization Fund includes roughly $8.8 billion as flexible fiscal relief and another $5 billion as incentive grants that foster new initiatives. An important way to stimulate the economy is to create jobs in economically depressed areas. Stabilization funds should be used to protect the state’s vital services and vulnerable populations and should not be used to supplant other federal funds.
·
Target infrastructure projects to high-unemployment communities .
States should focus capital investments in industry sectors – including highway construction, school construction, basic scientific research, parks and prisons – to provide an economic stimulus in communities with high unemployment. These investments should be implemented in a manner that supports training, skills formation and job opportunity.