One year ago today, President Joe Biden signed the American Rescue Plan Act of 2021, a $1.9 trillion economic relief package that was intended to address the need for short-term economic relief and provided long-term investments for economic recovery from the COVID-19 pandemic.

Enacted a year after the pandemic was declared in March of the previous year, the American Rescue Plan included $350 billion in new funding for state, local, territorial and tribal governments through the Coronavirus State and Local Fiscal Recovery Fund. Within this fund, $195 billion is distributed directly to state governments and the District of Columbia through one or two disbursements. States must obligate this funding by Dec. 31, 2024, and expend it by Dec. 31, 2026.

In an effort to help states make decisions on how to spend this influx of money, The Council of State Governments has worked over the past year to provide timely resources and analysis on the ARPA.

CSG launched a website dedicated to fiscal policy updates in March 2021 and immediately began building a database that captures state utilization of these funds in order to help state leaders better understand restrictions and opportunities.

Using this large influx of funds to maximize economic recovery presents both opportunities and challenges for states. Recognizing the desire for our state leaders to learn and share best practices, CSG conducted an extensive 50-state scan of the allocation of ARPA funds, focused on the State and Local Fiscal Recovery Fund. State ARPA allocation data was collected by analyzing state actions, enacting legislation appropriating ARPA funding, and State Recovery Plan Performance Reports submitted to the U.S. Department of the Treasury. In collaboration with the National Association of State Budget Officers, a CSG affiliated organization, the state allocations were reviewed and verified by state budget offices.

Currently, the CSG State ARPA Utilization Database has all 50 states reporting and includes actions through October 2021. This data is actively being updated as new information reports. View the database at csgovts.info/arpadatabase.

“We hope state leaders will use the State ARPA Utilization Database to learn and share best practices which will help states make informed decisions that will lead to state economic recovery,” said Sarah Needler, director of research for The Council of State Governments.

This database includes information on categories of spending, legislative authority, summary of fund allocation, authorizing language, distributing entity, distribution method and more.

A few key findings from the states include:

  • The majority of state funds have been dedicated to the categories of Revenue and Taxation (22%) and Management and Administration (20%).
  • More than half of states have invested in the categories of Management and Administration (33 states), Revenue and Taxation (28 states) and Economic and Community Development (25 states).
  • States have dedicated funds to over 69 programs focused on Public Health and over 47 programs focused on Economic Development.

“State leaders are looking for opportunities to maximize the impact of this influx of federal funding,” Needler said. “We have received a broad range of requests from policymakers on the allowable uses of State and Local Fiscal Recovery funds, including inquiries about using funds for food pantries, trails and parks, behavioral health, workforce development and more.”

While there are some restrictions on the use of these funds, states have considerable discretion in deciding how best to use this funding to meet the needs of their states.

State allocations from State and Local Fiscal Recovery Fund can be used to:

  • Support the public health response.
  • Address the negative economic impacts caused by the public health emergency.
  • Serve the hardest-hit communities and families.
  • Replace lost public sector revenue.
  • Invest in water, sewer and broadband infrastructure.
  • Ensure premium pay for essential workers.

Resources, including analysis of various components of the American Rescue Plan and enacted federal support for states, are available on the CSG Fiscal Policy website. The CSG research team is also accepting requests from state leaders who have specific questions about the American Rescue Plan or other state recovery efforts. State leaders can submit questions via email to [email protected].

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About The Council of State Governments: Founded in 1933, The Council of State Governments is our nation’s only organization serving all three branches of state government. CSG is a region-based forum that fosters the exchange of insights and ideas to help state officials shape public policy. This offers unparalleled regional, national and international opportunities to network, develop leaders, collaborate and create problem-solving partnerships. Learn more at www.csg.org.

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