California, Other States Nearing End of Federal Stimulus Package Aid

California and many other states likely will continue facing significant budget challenges over the next few years, particularly as federal stimulus funding dries up, the AP/San Francisco Chronicle reports.

Stimulus Funding

In 2009, the Democratic-led congress passed an $814 billion federal economic stimulus package to boost the economy and help states provide services to residents.

By June of this year, the federal government will have spent about $165 billion on temporary aid to states. A large portion of the funds has gone to education and health care, for expenditures such as reimbursing hospitals and physicians for treating the growing number of Medicaid beneficiaries.

California's Funds

California has received about $51 billion to date out of the $85 billion total that it expects to receive from the stimulus package, according to a state website that monitors stimulus spending.

About half of the funds California has spent so far have gone toward:

• Medi-Cal, California's Medicaid program;
• Unemployment insurance;
• Food stamps; and
• Other safety-net programs.

Assistance Drying Up

Although many states have benefited from the stimulus package, most of the funds will run out this year. Without additional federal assistance, many state legislatures will not have sufficient funds to maintain current service levels and could impose new budget cuts.

According to the National Conference of State Legislatures, 31 states and Puerto Rico face budget deficits totaling $82.1 billion for fiscal year 2012.

California's Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said it is disappointing -- but not surprising -- that states are unlikely to receive more federal assistance this year (Freking, AP/San Francisco Chronicle, 1/6).