The Recovery Act is providing immediate fiscal relief to states and localities through additional funds for Medicaid, education, and other basic services including public safety and law enforcement. The Recovery Act is also providing funding for investments in transportation, community development, energy, and environmental areas that will create long-term economic growth opportunities.
In Fiscal Year 2009, nearly two-thirds of Recovery Act funds estimated to be spent by states will be in the area of health—primarily the result of the temporary increase in Medicaid FMAP funding. However, over time, the focus of Recovery Act spending will change from fiscal relief to investment in economic growth. By fiscal year 2012, transportation spending, along with investments in community development, energy, and environmental areas that are geared more toward creating long-run economic growth opportunities will represent approximately two-thirds of the approximately $23 billion in Recovery Act funded spending by states and localities in 2012. This spending reflects investments in highways, high speed rail, broadband technologies, distance learning, clean water and energy efficiency.
