Colorado’s share of federal stimulus package benefits should approach $7 billion over the next two years, according to new estimates that factor in tax breaks and expansions of existing revenue streams under the American Recovery and Reinvestment Act.
About $3.5 billion in direct federal spending — an increase from earlier $2.8 billion estimates — should flow through programs as varied as unemployment benefits and highway construction. On top of that, another $3.2 billion in tax breaks such as child-care credits will help Coloradans.
Also, the state will have a crack at portions of more than $25 billion remaining in competitive federal grant programs, potentially making its grab even bigger.
Nationally, the state’s overall benefit now ranks 26th, according to calculations by the Washington, D.C.-based Center for American Progress, which pegs the state’s potential stimulus at $7.2 billion.
More money would flow to Colorado if it weren’t for its jobless and poverty rates, which are healthier than the national average. Those indicators are tied to formulas determining the size of some allocations.
“Colorado gets a pretty sizable chunk of money and a lot of these programs are targeted around the country where they’re most needed,” said Will Straw, an analyst with the center, which recently released stimulus estimates closely matching those of Colorado budget analysts. “Colorado is doing relatively well in this recession (compared with) many other states.”
President Barack Obama signed the massive $787 billion recovery plan into law in Denver last month. That money looks like this: 65 percent in direct spending in the economy, 35 percent through tax cuts. The big winners are education, transportation projects and safety-net programs.
Previous analyses of the stimulus law’s impact on Colorado didn’t count expansion of unemployment aid and all available grant funds.
A report released by the staff of the state’s new Economic Recovery Accountability Board, designed to track stimulus funds filtering into Colorado, pegged the state’s increased share of unemployment funds over the next two years at $385 million.
Most of that money will extend benefits to the unemployed by 20 weeks. And Colorado is opting to increase those checks by $25 a week through the end of 2009.
The state also can count on additional millions available through criminal-justice grants, Pell grants for college assistance and other housing aid.
Five different tax benefits make up the projected $3.2 billion in tax cuts:
• Child tax credit, $163 million.
• Alternative minimum tax patch, $1.1 billion
• Recovery zone bonds, $48 million
• Earned income tax credit, $54 million
• Making Work Pay credit, $1.9 billion
Based on Center for American Progress numbers, Colorado’s per capita share of stimulus funds ranks 49th, ahead of only Utah.
Kathy White, project director for the Colorado Fiscal Policy Institute, says that makes sense given the formulas.
Colorado’s unemployment rate was 6.6 percent in January, a full percentage point lower than the U.S. figure.
“As is appropriate, the stimulus dollars are targeted to the states that need it the most, like Michigan or South Carolina,” White said. “How unfortunate for South Carolinians that their governor wants to turn down the stimulus money. They hit double-digit 10.4 percent unemployment in January. That was the second-highest rate in the country behind Michigan.”
Miles Moffeit: 303-954-1415 or mmoffeit@denverpost.com
