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How cities and counties are placing American Rescue Plan {dollars} to work


Because the COVID-19 financial and public well being emergencies slowly abate, native leaders nationwide are adjusting to a actuality during which—at the least within the brief time period—they’ve important sources to deal with each acute and long-standing challenges. Lots of these sources are flowing to cities and counties by way of the American Rescue Plan Act’s (ARPA) versatile State and Native Fiscal Restoration Funds (SLFRF) 

Our three organizations—the Nationwide League of Cities, the Nationwide Affiliation of Counties, and Brookings Metro—are monitoring how cities and counties are utilizing these versatile funds by way of our Native Authorities ARPA Funding Tracker. The most recent knowledge, which jurisdictions submitted to the Treasury Division for exercise by means of December 31, 2021, displays choices that cities and counties made within the seven months after receiving their first tranche of SLFRF {dollars}. This knowledge comes from 89 cities and 240 counties which have at the least 250,000 residents; they’re required to make frequent experiences to Treasury on how they’re deploying the funds. 

ARPA permits SLFRF recipients to make use of the {dollars} to deal with a variety of wants in response to the pandemic and its impacts. As of the top of 2021, these 329 jurisdictions had recognized greater than 4,500 discrete initiatives for which that they had budgeted at the least a portion of their versatile funds. Our organizations analyzed the challenge knowledge, together with (as we described in February 2022) “coding” every challenge into considered one of seven total spending teams (group assist; financial and workforce improvement; authorities operations; housing; infrastructure; public well being; and public security), after which into 41 spending sub-groups that present additional element on the usage of the funds. On this piece, we determine 4 key takeaways about metropolis and county priorities from the brand new knowledge. 

Massive counties and cities had budgeted 41% of their whole SLFRF funds, or 82% of their in-hand first tranche funds, by the top of 2021 

Altogether, the 329 giant cities and counties are receiving $62.0 billion in SLFRF {dollars} in two roughly equal tranches, distributed in Might 2021 and Might 2022. As of December 31, 2021, that they had budgeted a mixed $25.3 billion. That represented roughly 41% of their whole allocation, or 82% of their accessible first-tranche funds. Budgeted funds are those who cities and counties have expressly put aside by means of legislative appropriations or related native processes for eligible initiatives they determine in experiences to Treasury.  

Cities and counties had budgeted 40% of their total SLFRF allocation by the end of 2021

With 40% of SLFRF {dollars} dedicated, giant cities and counties are collectively the place we’d have anticipated them to be on the finish of 2021. That they had many pressing financial, fiscal, and public well being wants to deal with with their first tranche of funding. On the similar time, many have been awaiting the ultimate SLFRF rules to find out how they’d be capable to allocate the funds; Treasury revealed that remaining rule in January 2022. 

Cities have been a bit quicker to finances their SLFRF {dollars} than counties. The 89 cities mixed had budgeted $14.5 billion by the top of final yr, or 55% of their whole allocation. That displays partially the outsized affect of New York Metropolis, which had dedicated its full $5.9 billion allocation; excluding New York, the opposite 86 cities had budgeted 42% of their mixed SLFRF {dollars}. The 240 counties, against this, had budgeted 30% of their mixed allocation by December 31. This implies that many counties have been taking a extra conservative method, or had extra complicated processes to formally approve the usage of SLFRF {dollars} than cities. 

Precise expenditures on cities’ and counties’ budgeted initiatives as of December 31 represented 10% of their whole SLFRF allocations, or 20% of their accessible first-tranche funds. Once more, given the budgetary and procurement processes native governments should comply with, this fee isn’t a surprise. Foreseeing this, Congress gave SLFRF recipients by means of 2026 to completely expend their allocations. 

Authorities operations accounted for the biggest share of cities’ and counties’ budgeted ARPA funds  

Congress and the Biden-Harris administration argued for ARPA to assist state and native governments partially to forestall a reoccurrence of the Nice Recession’s aftermath, when state and native employment by no means absolutely rebounded from the deep cuts it sustained. ARPA and the rule implementing SLFRF thus present native governments with broad latitude to spend the {dollars} to rehire workers laid off as a result of pandemic, present them with again or premium pay, rent further workers to assist administer SLFRF {dollars}, and put money into amenities and methods that assist authorities do its work in a post-pandemic world. Cities and counties may also use their allocation for “income substitute”—primarily, contributions to the native basic fund, in accordance with the quantity of income they have been estimated to have misplaced as a result of pandemic.  

We classify these initiatives collectively as “authorities operations,” and enormous cities and counties budgeted a mixed $10.7 billion towards them by means of the top of 2021, or 42% of their whole budgeted SLFRF {dollars} ($25.3 billion). Authorities operations was the only largest use of budgeted {dollars} for each cities and counties, accounting for 50% of budgeted funds in cities and 32% of budgeted funds in counties. 

Cities and counties budgeted the largest share of their SLFRF dollars toward government operations  

Cities, for his or her half, made liberal use of the income substitute provisions, designating $5.5 billion to the “fiscal well being restoration” spending sub-group. Many giant cities, together with Buffalo, N.Y., Houston, New Orleans, Pittsburgh, San Antonio, San Diego, and San Francisco budgeted at the least $100 million for this goal. Chicago alone devoted $1.3 billion of its $1.9 billion allocation to fiscal well being restoration. That famous, about half of cities additionally budgeted SLFRF {dollars} towards authorities worker wages or hiring. 

Counties designated a mixed $1.3 billion of their budgeted SLFRF {dollars} to fiscal well being restoration, and one other $1 billion towards their workers. They invested extra considerably than cities in amenities, gear, and IT, with greater than 300 discrete budgeted initiatives on this space totaling greater than $750 million. Many of those have been capital investments to advertise public well being, resembling upgrading air flow methods in county buildings to forestall the unfold of COVID-19. Others assisted disproportionately impacted communities, resembling upgrades to shelters for home violence victims or early-education facilities. 

Past authorities operations, giant cities and counties unfold their budgeted ARPA {dollars} pretty evenly throughout different priorities 

Our Native Authorities ARPA Funding Tracker examines six main spending classes along with authorities operations. As of the top of 2021, giant cities and counties had unfold their budgeted SLFRF {dollars} broadly throughout these classes: 14% to public well being; 12% to infrastructure; 9% to financial and workforce improvement; 9% to housing; 8% to group assist; and 6% to public security. On this approach, native governments appeared to be profiting from the versatile and important ARPA sources to deal with a spread of regionally decided wants. 

There have been some notable distinctions between county and metropolis makes use of of the funds. Counties, which generally function native public well being methods, devoted a significantly bigger share of their budgeted ARPA funds towards public well being (20%) than cities (9%). Counties additionally budgeted a bigger share towards infrastructure (14%) than cities (10%), with sewer and water methods accounting for the majority of their budgeted infrastructure spending, adopted by broadband. Cities spent a considerably increased share of their ARPA funds on public security (7%) than counties (4%)—investing most importantly in police division capability in addition to violence discount/prevention methods. 

Cities and counties budgeted their SLFRF dollars across a range of local priorities

Whereas cities and counties differed considerably of their SLFRF finances priorities, Covid-related public well being initiatives have been the most typical sort of challenge funding for each varieties of jurisdictions by means of the top of 2021. Each cities (143 initiatives) and counties (505 initiatives) used ARPA {dollars} to assist methods resembling vaccination and testing websites, public well being communications, and monetary incentives for residents and workers to get vaccinated. Certainly, numerous counties and smaller cities that had but to finances a lot of their allocations nonetheless put aside {dollars} for pressing pandemic-related well being responses. 

One further noteworthy sample throughout cities and counties: The bigger the allocation a jurisdiction acquired, the extra various the set of priorities they sought to deal with. The common metropolis or county that acquired greater than $250 million in SLFRF {dollars} budgeted funds throughout 10 detailed spending classes (out of 40 whole), in comparison with six classes for these receiving between $100 million and $250 million, and 5 classes for these receiving lower than $100 million. This implies that the budgeting course of in most communities led them to deal with extra—and extra various—priorities with bigger SLFRF grants, relatively than utilizing the {dollars} to deal with one or two giant challenges at scale. 

Metropolis and county spending priorities are persevering with to evolve 

Total, by means of the top of 2021, America’s giant cities and counties made important progress towards deploying their versatile ARPA allocations. They addressed exigent wants—notably round restoring important authorities companies and ramping up public well being responses—whereas navigating native budgeting processes and a few uncertainty concerning the remaining guidelines for the SLFRF program. And so they used the versatile program to start to deal with a wide range of regionally particular wants.  

Nonetheless, there have been many jurisdictions, notably counties, that had budgeted solely a small share of their allocations by means of the top of 2021. That has doubtless shifted in intervening months, with extra locations budgeting and obligating SLFRF-supported initiatives. Some jurisdictions had already formally accepted broad spending priorities in 2021 (e.g., Detroit and Prepare dinner County, Unwell.), however had not but chosen particular initiatives to implement these priorities. And a number of other locations remained engaged in strong group engagement efforts to make sure residents’ priorities have been thought of in budgetary choices. Others have been coordinating with their states on precedence initiatives or closing out response initiatives funded by the CARES Act of 2020. The tempo of spending commitments in any given group doubtless displays a mixture of financial, fiscal, political, and cultural situations and norms. 

With many locations having addressed acute wants with the primary spherical of ARPA funds, cities and counties might now have the chance to think about extra strategic, scaled methods with their remaining versatile funds. They might do extra to align their SLFRF-supported initiatives with these in surrounding jurisdictions—for instance, Minneapolis’ collaboration with Hennepin County, Minn. on public well being upgrades to its emergency homeless shelters, or Seattle’s partnership with King County, Wash. to supply coaching to hospitality employees of colour negatively impacted by the pandemic. They’ll additionally use SLFRF {dollars} to information how funding from the Infrastructure Funding and Jobs Act (IIJA) might land of their communities, as counties resembling Frederick, Md., Pierce, Wash., and Seminole, Fla. are doing with respect to broadband infrastructure. 

Total, the most recent accessible knowledge confirms that cities and counties have used versatile American Rescue Plan {dollars} to deal with many acute, pandemic-related challenges. It additionally reveals that native leaders nonetheless have important scope to deal with a number of the deeper structural points that exacerbated the impacts of the COVID-19 disaster on deprived populations and communities. 

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