Recovery Funds Coming To Massachusetts

(Throughout the 27-month program)

  • Twenty-eight different federal agencies such as the Departments of Education, Health and Human Services, Transportation and Energy have been allocated a portion of the $787 Billion in recovery funds. Each federal agency develops specific plans for how it spends its Recovery Act funds. It then makes grant awards or contracts to state agencies, non-state entities (cities, towns, non-profits, private companies, universities, etc.) or directly to citizens.

  • These awards flow to recipients in one of the following ways:

    • Through a competitive bid or grant processes administered by the allocating agency;
    • Through approved allocation formulas;
    • Through discretionary grants distributed at the discretion of a particular agency; and
    • Through entitlement programs such as unemployment compensation which goes directly to citizens.

Figure 1

Graph showing anticipated arra funds by recipient Total $14 Billion. To municipalities, non-profits and private enterprise: $3,025,969,235, Direct to citizens: $4,655,959,473, and to state agencies $6,117,481,351

  • Massachusetts is expected to receive approximately $14 Billion in Recovery Funds. Approximately $4.7 Billion will go directly to citizens in the form of tax benefits. Slightly over $6 Billion will be distributed through state agencies. The remaining $3 Billion will be awarded directly from the federal government to municipalities, private companies, universities and research institutions, non-profits, etc.

Recovery Funds Coming Through State Agencies

(Throughout the 27 month program)

Figure 2

Award Spending Overview

As of September 30, 2009

  • The Commonwealth of Massachusetts is reporting on the 104 different awards made to state agencies (Figure 3 and 4).

Figure 3

*"Other" includes Attorney General, Victim Witness Assistance, MA Cultural Council, and Administration & Finance

  • Although the information provided in this report focuses on expenditures by and through state agencies (Figure 4), the federal recovery website (www.recovery.gov) will detail spending and job information for these awards in addition to the non-state agency awards on October 30 th.

Figure 4

*"Other" includes Attorney General, Victim Witness Assistance, MA Cultural Council, and Administration & Finance

Job Impact Overview

(Information based on State Agency Spending)

As of September 30, 2009



Figure 5

  • The federal government requires that all jobs be quantified as Full Time Equivalents (FTEs), an approach that relies on actual hours worked rather than the number of individuals at work.

  • Based on the guidelines from the Office of Management and Budget (OMB), Massachusetts has reported 8,753 Direct FTEs (Figure 5). However, an additional 40 FTEs have been created with ARRA programs that are not subject to OMB reporting, for a total of 8,792 FTEs.

    How did Massachusetts Calculate Full-Time Equivalents?
    FTE Count = Actual Cumulative Hours Worked / (Typical (Full Time Weekly Schedule Hours) x (Weeks in the Reported Quarter)
    In general, the full time weekly schedule is 40 hours or 520 hours per quarter.

    For example, if 100 people were hired in the last week of September and each worked 40 hours then they would count as 7.69 FTEs (4000 hours divided by 520 hours).

  • The FTE count does not reflect the direct number of actual people employed through state agency programs. Based on the data collected, the 8,792 FTEs actually represent 23,533 direct jobs (Figure 6).

Figure 6

  • As the number of direct jobs increases, other jobs are added as businesses hire more people to meet the new demand created by the direct jobs. For instance, a new construction site project creates new opportunities for retail businesses in the area. This is called the multiplier effect.

  • The multiplier effect of such indirect jobs (jobs created or retained by suppliers, for example) and induced jobs (impact of spending in local communities) in Massachusetts ranges, according to a report done on the recovery program by the President's Council of Economic Advisors, from about 1.5 to 3.9. To be conservative, we are estimating indirect jobs using a multiplier of 1.5 times the number of actual workers employed.
  • Based on 23,533 actual workers through September 30, 2009 we estimate the indirect and induced jobs to be 11,767.

  • Through September 30, 2009 the total number of ARRA-related jobs in Massachusetts is 35,300 (23,533 + 11,767). The President's Council of Economic Advisors estimates that at the end of the 27-month ARRA program, Massachusetts will retain or create 79,000 direct, indirect, and induced jobs.

Reporting Overview

  • Section 1512 of the federal Recovery Act, requires detailed reporting by each State to the Office of Management and Budget (OMB) on the projects and activities funded by ARRA that are awarded through state agencies. Other recipients will report directly to the federal government.

  • The first report is due 180 days after enactment and subsequent detailed reports will be required each calendar quarter thereafter. A final report will be issued by the federal government sometime after October 30 th and will be made available to the public on the federal recovery website.

  • Massachusetts' recovery legislation also requires additional data to be reported beyond federal requirements, including awards falling below the federal reporting threshold of $25,000, ARRA job demographics, and status reports that indicate if ARRA-funded projects are on time.
  • Massachusetts has elected to report centrally, meaning all agencies are reporting to the Massachusetts Recovery and Reinvestment Office (MassRRO) in the Executive Office for Administration and Finance (ANF). The MassRRO submitted one report, rather than all state agency grant recipients reporting individually.