Federal Stimulus Funds Help Fuel North Carolina Green Economy Projects

Federal stimulus funds approved earlier this year by Congress are doing more than filling budget gaps in states across the nation. During a year in which it otherwise may be virtually impossible to direct much funding to starting initiatives aimed at growing the economy, many states are using federal stimulus funds to implement new programs.

In North Carolina, Gov. Bev Perdue recently announced that several green energy programs focusing on job creation and promoting greater use of renewable energy resources will be funded through a portion of the state's share of American Recovery and Reinvestment Act (ARRA) funds.

In June, Gov. Perdue announced the U.S. Energy Department's approval of $75.9 million in federal stimulus funds with authorization to spend $30.4 million immediately. The state will receive the remaining funds as it shows successful implementation of the plan, according to the governor's office. Two key components of the approved plan include:

• $18 million to create an Energy Investment Revolving Loan Fund that will provide no- and low-interest loans for renewable energy and energy efficiency projects to businesses, nonprofits, local governments, public schools, and other agencies; and,
• $7.85 million for workforce development initiatives through the state's community college and university system to support training for jobs in emerging fields.

The governor recently also signed a measure to move the State Energy Office from the Department of Administration to the Department of Commerce. The idea is to more closely link State Energy Office activities with economic development. The bill also makes changes to the Energy Policy Council by refocusing its efforts on creating green jobs and protecting the environment while improving representation from environmental groups and alternative energy producers, according to the governor's office.

Lawmakers approved and Gov. Perdue signed the FY 2009-11 budget earlier this month, which authorizes $5 million in ARRA funds to support the Green Business Fund, providing grants to small businesses, nonprofit organizations and state agencies to encourage the growth of a green economy. Another $4 million in ARRA funds and $1 million in nonrecurring state funds will support the Biofuels Center of North Carolina to continue implementation of the North Carolina Strategic Plan for Biofuels Leadership.

While federal stimulus funds are helping state fiscal situations in the short-term, North Carolina is not exempt from the effects of the recession. The enacted budget reflects decreased funding for several agencies as state revenues continue to decline. Within the Department of Commerce, reductions include:

• $14.8 million in FY10 and $14.5 million in FY11 for the NC Biotechnology Center, down $1.5 million over the biennium;
• $1 million for the Defense and Security Technology Accelerator, a business incubator focusing on economic development opportunities in industries related to homeland security and national defense, down from $1.5 million approved in FY09; and,
• $700,000 in FY10 for the One NC Small Business Fund to provide matching grants to businesses that qualify for federal SBIR/STTR funds, down from $3.5 million approved last fiscal year.

Funding for the e-NC Authority - a statewide broadband initiative - was reduced by $19,800 in FY10 and $29,700 in FY11 from the agency's recurring annual appropriation of $495,000.

The enacted budget includes about $2 billion in cuts, more than $1 billion in federal stimulus funds, and nearly $1 billion in higher taxes and fees. Days after the budget was signed into law, state lawmakers voted to increase the $19 billion spending plan for this year by nearly $7 million, leaving less than $4 million unspent at the end of the fiscal year, reports the Associated Press.

The Appropriations Act of 2009 is available at: http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v8.pdf.