The Assembly Committees on Local Government and Housing and Community Development (HCD) invited local government officials to testify at a joint hearing held March 25 investigating the impact of the American Recovery and Reinvestment Act (ARRA) at the local level. The federal funding is extremely important to California, especially given how the economic crisis has contributed to the state’s significant cash flow problems.

In her opening statement, Assembly Local Government Chair Anna Caballero (D-Salinas) commented on how ARRA funds going to local governments will create jobs, stressing that job creation is the most important thing the government can do to help turn the tide on the economic downturn. Assembly Member Norma Torres (D-Pomona), chair of HCD, said that she is focused on getting these federal funds out the door as fast as possible and asked the panelists to tell legislators what kind of support they need from the state to do this.

Greg Jolivette, principal fiscal and policy analyst with the Legislative Analyst’s Office told the Assembly members that of the $1 billion the state receives in formula based housing funding, 65 percent will go directly to the local level. Panelists from a variety of jurisdictions and local agencies addressed funding needs and realities at the local level.

Stockton Vice-Mayor Kathy Miller testified about how her city will benefit from the funds. The city stands to receive $12.1 million of the $529 million of Neighborhood Stabilization Program (NSP) funds allocated to California. Stockton is known world-wide as the foreclosure crisis’ ground zero so while these funds will help the city address this problem it will only make a small impact according to Miller. The city has allocated $7.2 million for the acquisition of single family homes to renovate and resell. This will cover about 200 homes initially with the goal that the resale of the homes will replenish the funds so more can be purchased and fixed.

Miller conveyed the importance of ARRA funds to Stockton. "It’s not just about individual buildings or projects. It creates ripple effects in the community," said Miller "Stockton has an unemployment rate of 18 percent so you can’t underestimate the impact that these funds will have on a community like Stockton."

The San Diego region stands to reap benefits from ARRA funding according to Gary Gallegos, San Diego Association of Governments executive director. He told the committee that ARRA funds allocated for San Diego projects will create 2,600 jobs and also help other regions because many of the products used to complete the projects will come from other areas.

There was consensus among the panelists that ARRA’s emphasis on transparency and accountability is extremely important. However, several raised concern that this would put extra burden on local agencies which are grappling with the fact that declining revenues have made layoffs necessary to bring budgets into balance.

Local governments are encouraged to work closely with state organizations and their Metropolitan Planning Organizations on how to access the federal funds.

The League is continuing to update its "City Funding Book, which has information for cities on how to access and apply for ARRA funds. The most recent version is now available on the Federal Economic Stimulus section of the League’s Web site .