Understanding Federal Investments

Health Care

Among eligible uses, funds can be invested for workforce development in health care and the expansion of telehealth services. States also can use this funding to lower barriers to licensure for health care workers relocating to other states through the digitization of occupational licensing systems. For instance, Vermont implemented digital licensing and now it takes a practicing nurse only 45 minutes to obtain a state nursing license. (See an example at sos.vermont.gov/opr/online-services).

Workforce Training

States can use the ARPA Recovery Fund to invest in apprenticeships as a mechanism for getting people back to work. Individuals can upgrade skills, shift career paths into new and emerging industries and return to work in industries hit hardest by the pandemic. Connecticut Gov. Ned Lamont has proposed legislation that would allow the state to leverage $103.2 million of ARPA Recovery Fund support to coordinate efforts by educational institutions, businesses and community partners in sector-based training for in-demand industries; youth employment and wraparound services; services for at-risk and justice-involved youth; and extension of operating hours and opportunities at 10 Connecticut Technical Education and Career System Schools. The funding for these schools would support expanding apprenticeship training programs in areas like electrical, heating/cooling, plumbing, sheet metal and barbering.

Food Insecurity

States can leverage ARPA funding to invest in food programs and nutritional services, including Supplemental Nutrition Assistance Program (SNAP) benefits and programming through $1.35 billion designated for state agencies.

Ensuring Equity

To ensure the post-pandemic recovery is inclusive and sustainable for all individuals, the U.S. Department of the Treasury’s Interim and Final rules require states to consider equity in spending federal recovery funds. People with disabilities, for example, have been disproportionately impacted by the pandemic because of disruptions to service delivery, underlying health conditions, group living conditions and limited access to information, among other factors. Risks of disparate recovery among individuals of different ethnicities and geographic locations also exist. States can use the ARPA Recovery Fund dollars to develop reports, surveys and data collection initiatives to inform state efforts to generate a more inclusive workforce.

Using Evidence

As states receive significant one-time federal funds to facilitate recovery, policymakers should be positioned with the best available data and research to inform decision-making to achieve optimal outcomes. Evidence-based policymaking provides an opportunity for states to promote innovation, strengthen transparency and accountability and foster a culture of continuous learning and improvement. This aligns with Treasury’s Compliance and Reporting Guidance for the ARPA Recovery Fund, which directs states, territories and other jurisdictions to report if they use funds for evidence-based interventions and/or rigorous program evaluations. For example, North Carolina has proposed to use a portion of its funds to support Results First evidence-based initiatives. It is designed to address top risk factors associated with severe COVID-19 outcomes including diabetes, cancer, heart disease, obesity and smoking. Funds also are provided for the evaluation, implementation and ongoing monitoring of interventions.

For more resources on evidence-based policymaking, visit csg.org/evidence-based-policymaking.

How States are Using ARPA Funding

CSG recently conducted an extensive 50 state scan of the allocation of ARPA Recovery Fund resources. Data was collected by analyzing state actions, enacted legislation appropriating funds and Performance Reports submitted to the Treasury, as required by rule. In collaboration with the National Association of State Budget Officers, state allocations were reviewed and verified by state budget offices. The State ARPA Utilization Database includes:

• The general policy/program area of fund allocation
• A link to relevant legislation or documentation of executive action
• A brief description of the fund allocation
• Enabling language from legislation and/or other documents
• Authorized budget amount
• Fund distribution method
• Entity with final authority for determining funding distribution

The database includes information from all 50 states, though 11 states had not allocated any funds as of Feb. 17.

Most states are allocating ARPA Recovery Fund dollars regularly and have until the end of 2024 to fully allocate and until 2026 to complete spending. California, Indiana, Maine and Montana have appropriated all available ARPA Recovery Fund dollars. The top two recipient policy areas are Revenue and Taxation (21.72%) and Management and Administration (20.92%). While those areas have received the largest dollar amount, Health and Human Services (20.80%) and Economic and Community Development (14.50%) have the highest number of program categories receiving funds.

Out of the 39 states having made allocations, public health is the most funded category, with 69 initiatives created or sustained through the ARPA Recovery Fund. For example, Michigan is allocating $160 million for direct payment grants to hospitals to cover increased medical costs. Nevada plans to disburse $28.5 million to cover expenses the state incurred while dealing with the public health emergency.

Another program area receiving substantial funding is economic development. Many programs are intended to help small businesses or achieve equitable economic recovery. Louisiana is allocating $10 million toward the Small Business and Nonprofit Assistance Fund. Michigan has allocated $100 million for the Community Revitalization Program to address the needs of Michigan communities disproportionately impacted. Vermont has allocated $150,000 to provide outreach and technical assistance for Black and Indigenous People of Color (BIPOC)-owned businesses.

The ARPA Recovery Fund is being used primarily for revenue replacement, which allows a broader use of funds outside the original four categories. States experienced reduced revenues in 2020 and 2021 and the ARPA Recovery Fund is allowing states to avoid cuts to state programs and laying off workers. The Treasury’s Final Rule offers a standard allowance for revenue loss of $10 million. States can choose between the standard amount or complete a full revenue loss calculation (the Interim Final Rule provides the full equation). Wyoming is allocating $12.6 million to address revenue loss and Pennsylvania is using $3.8 million to continue critical government services.