Alan Berube and Eli Byerly-Duke September 7, 2021
When President Joe Biden signed the American Rescue Plan Act (ARP) into law last March, it was a momentous occasion for local governments around the country. In contrast to past federal fiscal relief efforts—including the CARES Act of 2020—ARP provided a large number of cities and counties with direct, flexible support from the federal government. And the sums on offer were substantial: $130 billion in Fiscal Recovery Funds (FRF) for cities, counties, and tribes, often amounting to significant shares of local governments’ annual budgets.
The Treasury Department began disbursing these dollars in May, requiring larger recipients to submit initial reports by this week on how they are allocating the dollars to address the impacts of the COVID-19 pandemic, and to “build back better” for the future.
In turn, many big cities are telling Treasury: We’ll get back to you on that.
Treasury counseled cities to not commit all of their dollars immediately, so that they could respond to changing health and economic circumstances over the coming months.
And many cities may be awaiting the publication of the final Treasury FRF rule, so they can be sure their spending priorities meet official eligibility requirements.
Inglewood Mayor James Butts was asked on two occasions about the funds the City has received under ARPA, and both times responded they are waiting for final instructions from the Treasury, just as other cities are.
The Treasury has not provided a date as to when the Final Treasury FRF rule will be made available, however, cities have to earmark the money by 2024, and spend all funds by 2026.
Read the full article on Brookings.edu.
