The economic stimulus bill: accessing the resources.

• Position: News & Numbers

The American Recovery and Reinvestment Act (ARRA) provides funding to both state and local governments through a series of grants and loans distributed by various federal agencies, or in the case of local governments, sub-allocated by the states. Many of the funds will be distributed only for "shovel-ready" projects that must be completed within a specific time period. Therefore, state and local government officials need to pay close attention to these distribution formulas and immediately contact the appropriate federal agency or the governor's office to find out what money may be available under the new law and how to access it.

Initial Requirements. The ARRA sets forth some other broad requirements. No funds may be allocated for zoos, aquariums, golf courses, swimming pools, or casinos. Contractors and subcontractors working on projects funded by the ARRA must be paid the prevailing wage rate, as set forth in the Davis Bacon Act. And the new law also requires giving preference to American-made goods in construction and infrastructure projects financed by the Act.

How the Funds Will Be Allocated. According to the federal Office of Management and Budget, federal agencies will allocate the funding provided in the ARRA in five main ways:

* By Formula. Certain funds in the act are allocated by a formula, usually set in law, to states and localities. These include Medicaid, the State Fiscal Stabilization Fund (created by the economic recovery bill to help state and local governments avert budget cuts, the fund provides two block grants for states--a $39.5 billion grant earmarked for education and an $8.8 billion grant to help fund other key services), and highway infrastructure development.

* By Competition. Other programs allocate funding through competitive solicitations. Agencies (including the National Institutes of Health and the National Science Foundation) have distributed requests for proposals and convene panels to evaluate applications.

* By Demand. Some programs respond directly to demand from eligible individuals. These include premium subsidies for COBRA continuation coverage, unemployment insurance, food stamps, small business loans, and Pell grants for education.

* By One-Time Automatic Disbursement. The ARRA includes one-time benefits (e.g., $250 to Social Security, veterans, and supplemental security income beneficiaries).

* By Agency Plan. Many ARRA programs allocate funding according to public operating and spending plans...