WASHINGTON – States struggling under the weight of financial hardship can start applying for roughly $10 billion under a broader law designed to bolster the national economy.
Treasury Secretary John Snow (search) sent a letter Wednesday to the nation's governors as well as officials representing the District of Columbia, Puerto Rico and other U.S. territories, outlining what they need to do to get their share of the aid.
A total of $5 billion in aid is available this year and another $5 billion in fiscal year 2004, which begins Oct. 1.
That money, along with an additional $10 billion in new Medicaid (search) assistance to states, is part of a 10-year, $350 billion package, which includes a fresh round of federal tax cuts, passed by Congress and signed into law last week by President Bush.
"The Treasury Department will ensure that payments are made available as quickly as possible," Snow said.
Congress set up a formula to determine each state's and territory's share of federal aid based in part on its population figures, using 2000 census data.
As a result, California would receive the biggest slice, with $1.15 billion in aid over this year and next. Texas comes in at No. 2, with a total of $709 million, followed by New York with $645.3 million, Florida, with $543.5 million and Illinois, with $422.3 million.
To obtain its share of the $10 billion in federal aid, a state or territory has to certify that its proposed use of the funds is consistent with the new law. For instance, the aid will be used for "essential government services" or cover state costs for complying with various federal government mandates. A certification form was sent out to states and territories along with Snow's letter on Wednesday.
A state or territory can choose to file one certification form to obtain its share of funds for both this year and next. Or it can file separate certifications for each year. To obtain aid this year, state and territories must file their certifications by Sept. 30, the last day of the 2003 fiscal year. For states, filing one certification form for both years, however, Treasury won't process the 2004 aid payment until Oct. 1, the first day of the 2004 fiscal year.
Those that opt to file separate certifications each year, will need to file a certification to obtain 2004 aid by Sept. 30 of that year.
Treasury (search) will electronically transfer the money into accounts, designated by states and territories in their certification forms.
In addition to all 50 states, the District of Columbia and Puerto Rico, aid also is available to the U.S. Virgin Islands, Guam, the Mariana Islands and American Samoa, Treasury said.