On February 17, 2009, President Barack Obama signed the American Recovery and Reinvestment Act (ARRA) into law.  This bill represents a significant infusion of federal funds into state and local governments, as well as providing direct benefits to individuals, families and businesses. These RIPEC Comments provide information on some of the initiatives contained in the bill and outline a set of guiding principles for the state to consider as they implement the additional funding. 

The estimated state and local share for Rhode Island is more than $1.0 billion. Included in this table are funds that are available for use by the state and local governments. The estimated share for Rhode Island, including payments or tax cuts that would go directly to individuals, e.g., unemployment benefits, is more than $2.3 billion. These funds represent an opportunity for the state but they also carry risks to the long-term reform of Rhode Island’s fiscal structure.  RIPEC recommends the following guidelines be put in place as the state develops plans to use the stimulus money:

• Funding should be used to enhance Rhode Island’s short-term and long-term opportunities to construct a more viable and sustainable economy that is within the state’s abilities to manage and accomplish;
• Initiatives should not build the budget base, nor should they create additional demand for services;
• Consensus should be reached between the Legislative and Executive branch on the level and availability of funding;
• Fundamental structural change should not be put on hold;
• Projects should be completed in order of priority;
• The state should use existing infrastructure and state businesses wherever possible when implementing projects;
• A return on investment approach should be used when developing and selecting projects for funding;
• The state should undertake an analysis of the potential future fiscal position of Rhode Island when the stimulus funding ends;
• Funds should be used, when possible, to reduce future cost; and
• The working group for the implementation of the stimulus money should be a temporary structure, not one that will last past the use of the stimulus period.