Racial Disparities in disbursement of Stimulus Funding.

Today marks one year since the American Recovery and Reinvestment Act (ARRA) was signed into law. An analysis by Advancement Project, a national civil rights organization, of state ARRA fund allocations in 2009 and their diversity levels reveals states with greater racial and ethnic diversity received less funds in 2009. The range for ARRA spending per state resident starts at a low of $491 in Florida and goes to a high of $2289 in Alaska.

“Why we are seeing such glaring differences in spending is unclear,” said Anita Sinha, senior attorney, Advancement Project. “Too often we have experienced well-meaning federal programs and funding that never makes it to the communities for which they are intended.” Sinha continues, “A year later, there is cause for concern and investigation into the inequity in stimulus funding disbursement.”

Advancement Project also examined the relationship between state unemployment rates and ARRA spending which shows a significant disparity between unemployment rates and per capita ARRA funds received. For example, for every one percent increase in the unemployment rate, there is a decrease in ARRA funds of $28.48 per state resident.

“The ARRA is clearly not the quick fix we want it to be,” said Badili Jones of the Miami Workers Center and the Build a Fair Florida campaign. “While public investment is a step in the right direction for the economic security for our nation it is not enough. There is a need for clear targeting of funds to those communities most impacted by the recession and mortgage crisis: low-income Black and immigrant communities. We need stimulus spending, and even more of it, to create the equal economic opportunity that will get us out of this mess, but clearly it needs better targeting and tracking.”

Newly-released federal data published on www.recovery.gov indicate state ARRA funds allocations in 2009. A new feature of the website, the “diversity index,” shows the racial and ethnic diversity of each state. States are ranked from 0 to 100—a rank of 100 means that if two random people were picked in a state, there would be a 100 percent chance that they would be of different races or ethnicities. According to this index, California has the greatest diversity with a score of 83, and Vermont has the lowest diversity with a score of eight.

“The results show that there is a tremendous need to closely follow government spending, something that Advancement Project is dedicated to doing through our new Transparency in Public Finance program,” said Inger Brinck, public finance analyst, Advancement Project. “ARRA is just one of many funding streams that needs to be tracked to ensure that those in most need are being supported appropriately and not being left behind. In the coming weeks and months, we will publish further analyses of ARRA and other important issues related to government finances.”

To ensure that ARRA’s objectives are met, Advancement Project proposes that the federal government:

1. Make targeted investments: Create mechanisms and incentives for future ARRA funds so they are applied where they can clearly accomplish the most for an economic turnaround.

2. Collect specific data to ensure equity: Require data collection by race, ethnicity, and gender as a condition of funding to ensure that ARRA dollars are spent equitably.

3. Conduct equity assessments: Perform systematic evaluations of the effect of ARRA spending in order to maximize equity and inclusion and minimize adverse and unintended impacts.

4. Enforce civil rights laws: Investigate these disparities to ensure that states are not discriminating in the use of ARRA funds and, where necessary, pursue enforcement of Title VI of the Civil Rights Act, which prohibits discrimination in the use of federal funds.

“As a nation, we cannot afford to not have equity, transparency, and targeted investments to low-income communities of color during this near-depression, or economic recovery will evade us all,” concluded Sinha.

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