Category: National

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.

By Ishara Nanayakkara

Russia’s invasion of Ukraine on Feb. 24 and the ensuing war between the two countries have spurred global outcry. In response to the rapidly changing situation, the United States recently announced a series of unprecedented sanctions on Russian imports and investments, in alignment with decisions by allies in Europe and across the world.

Coinciding with federal efforts, state policymakers have taken bipartisan legal and regulatory action. Most measures involve stopping the importation of Russian alcohol, such as in Arkansas and Iowa, and divesting from Russian assets, as is underway in California, Pennsylvania, and West Virginia. Multiple state legislatures also have passed resolutions expressing their strong support for Ukraine and endorsing the response of the federal government (Table 1). Some of these resolutions, such as those in Missouri, South Carolina, and South Dakota, alsoencourage the federal government to provide weapons and military assistance to the government of Ukraine.

In Arkansas, alcohol distributors are no longer acquiring alcoholic beverages from Russia “in an effort to support the U.S…sanctions upon Russia,” according to the director of the Department of Finance and Administration. While existing stock will not be destroyed, alcohol distributors will not import additional product. Governor Asa Hutchinson is urging private companies in the state to consider these sanctions. Governors of Iowa and New Hampshire have followed suit and ordered the removal of Russian-produced alcohol products from their state-run stores and wholesale lists.

In Missouri, Lt. Gov. Mike Kehoe announced a bill that would require entities receiving public funding to suspend contracts with Russia. He also urged all businesses to stop selling Russian products and offered stores lists of alternative items. Strategic divestment of Russian holdings also is being discussed. Other states working to remove Russian alcohol and other products from shelves and halt imports include Tennessee and Virginia.

The second major sanction involves withdrawing investments in Russian assets. Earlier this month, Connecticut Treasurer Shawn Wooden made the decision to zero-out Russian investments from retirement plans and pension funds. Current government debt issued by Russia and investments in Russian companies add up to $218 million in the state. While Wooden’s motivation is to support Ukraine, he also sees this action as important to “protecting the long-term viability of [Connecticut’s] investments” and economic stability, as the national and global sanctions imposed against Russia make it a volatile market for investment. With similar intentions, California Senate Majority Leader Mike McGuire announced that bipartisan legislation would soon be introduced to divest from all Russian assets, totaling over $1 billion.  

The Idaho House State Affairs Committee voted recently on a resolution to sell $1.2 million of investments in Russia from Endowment Funds and roughly $300,000 in worker’s compensation funds. Colorado’s pension fund will remove $7.2 million from a Russian bank, Sberbank, which holds the majority of the $8 million Colorado has invested in Russian-owned companies. Similarly, New York’s Police Pension fund is in the process of withdrawing over $42 million in securities investments by Russian companies. Other states in the process of divesting Russian investments include Indiana, Kansas, Maryland, Montana, North Dakota, Pennsylvania, and Virginia.

In addition to these tangible maneuvers, multiple states have made symbolic gestures to show support for Ukraine. Notable sites such as Washington D.C.’s The Kennedy Center, San Francisco City Hall, The Lincoln Center in New York, Big River Crossing in Memphis and Niagara Falls have been illuminated in blue and yellow: the colors of the Ukrainian flag. Maryland went a step further and, on February 28, terminated ties with the Leningrad region in Russia. These sister-city ties were established to promote peace through local government connections in 1993.

Table 1. Passed and proposed legislation expressing support for Ukraine

State	Bill	Status	Summary
Alaska	Senate Joint Resolution 25	In Progress	Sanctions and export controls
Arkansas	Senate Concurrent Resolution 2	In Progress	Endorses sanctions and supports withdrawing investments
California	Senate Bill 1328	In Progress	Withdraws investments
Colorado	Senate Joint Resolution 22-004	Enacted, March 1	Endorses sanctions
Delaware	House Resolution 53	Enacted, March 8	Economic sanctions
Georgia	Senate Resolution 603	In Progress	Commits to imposing sanctions and divesting investments
Hawaii	House Resolution 32	In Progress	All business and government contracts with the Russian and Belarusian governments and contractors to cease, along with all work-related travel to Russia or Belarus; all sister-city or state relations will be terminated
Idaho	House Joint Memorial 6	Enacted March 8	Endorses sanctions
Illinois	House Joint Resolution 72	In Progress	Sanctions and coordination of resources for Ukrainian refugees
Maryland	House Bill 1482	In Progress	Endorses sanctions and supports withdrawing investments
Michigan	Senate Resolution 111	Enacted March 1	Endorses economic sanctions
Missouri	House Resolution 75	In Progress	Endorses strong sanctions and the provision of weapons
New Jersey	Senate Resolution 88	In Progress	Endorses economic sanctions
Ohio	House Resolution 195	Enacted March 2	Expresses support for Ukraine
Pennsylvania	House Resolution 175	In Progress	Divests funds and severs ties with banks, brokerage firms and investment companies
Rhode Island	Senate Resolution 2429	Enacted March 1	Supports federal response
South Carolina	Senate Bill 1112	In Progress	Supports financial sanctions and the barring of Russian planes from entering European Union and Canadian airspace; Encourages the provision of weapons of Ukrainian Armed Forces
South Dakota	Senate Resolution 702	In Progress	Endorses strong sanctions and military assistance
Tennessee	Senate Joint Resolution 1147	In Progress	Endorses an import ban, divesting investments, and sanctions
Virginia	Senate Joint Resolution 189	In Progress	Endorses economic sanctions
West Virginia	Senate Bill 730	In Progress	Withdraws investments

by Bill Swinford 

In his March 1 State of the Union address to a joint session of Congress, President Joe Biden presented a number of policy plans and proposals. Among those matters most important to state policymakers, the president:

— Noting “…most Americans and most of the country can now go mask-free…”, announced an updated federal approach to the COVID-19 pandemic, including:

• Continuing to protect against and treat the virus (including making antiviral pills available to anyone who tests positive at a pharmacy — called “test to treat”).
• Preparing for possible new variants.
• Preventing renewed shutdowns of schools and businesses.
• Expanding availability of vaccines worldwide.

— Highlighted portions of the Infrastructure Investment and Jobs Act:

• “We’ll build a national network of 500,000 electric vehicle charging stations, begin to replace the poisonous lead pipes — so every child — every American — has clean water to drink at home and at school.
• “We’re going to provide affordable high-speed internet for every American — rural, urban, suburban and tribal communities.
• “Four thousand projects have already been announced…
• “We will start fixing over 65,000 miles of highway and 1,500 bridges in disrepair.”

— Announced proposals designed to reduce inflation, including:

• Investing in U.S.-based manufacturing.
• Addressing supply chain challenges.
• Subsidizing child care and elder care.
• Reducing prescription drug prices (in part by letting Medicare negotiate drug prices).
• Cutting energy prices through climate change initiatives:
  • “…investments and tax credits to weatherize your homes and businesses to be energy efficient.
  • “double America’s clean energy production in solar, wind, and so much more.
  • “lower the price of electric vehicles…”

— Called for passage of “…the Bipartisan Innovation Act sitting in Congress that will make record investments in emerging technologies and American manufacturing.”

— Called on Congress to strengthen privacy protections across social media platforms. As noted in the recently released CSG Capitol Ideas magazine, “Technology companies (“Big Tech”) regularly collect millions of points of data on an individual. From online searches to social media posts, activity is tracked and catalogued to create a profile of an individual which facilitates tailoring the ads, sponsored content and recommendations to which they become exposed…In 2019, a study by the Pew Research Center found 81% of people believe they are unable to control the data collected by companies.”