LOC News
ARP Funds: What We Know Today
With the passage of the $1.9 Trillion American Rescue Plan (ARP) in March, billions of federal funds have been allocated for direct payments to states, cities and counties. Without question, the ARP represents a generational investment for the country in response to the significant impacts of the Coronavirus pandemic, and the economic losses in communities and businesses. As cities in Oregon evaluate their options, it’s important to understand the next steps that will bring clarity and also provide a sense of other federal funding sources that are available. On top of the direct city allocation, Oregon’s 36 counties will also receive direct payments. Some counties are likely already advancing conversations with their city partners about possible joint-investments or partnerships for projects of significant value to all communities in their region. The LOC would encourage this type of dialogue going forward, as more conversations between local governments could create important local partnerships for generational projects.
Treasury Spending Guidance Coming Soon
The plain language in the ARP on funds coming to local governments and states speaks to the core uses of public health, economic support for individuals and businesses, backfill for lost local revenue, and infrastructure related to water, sewer, and broadband. What’s still to come is further guidance from the U.S. Treasury for spending the direct payments, and more detail on where other federal funds are being deployed at the state level.
Additional Treasury guidance should be released within the next few weeks. According to the National League of Cities (NLC), federal agencies are wanting to provide comprehensive guidance, including anticipated questions. The NLC submitted comments to Treasury that focus on the use of funds and language recommendations to clear up some ambiguity in the recovery package.
Additional Revenue Streams are Unknown
In addition to the direct funding to states and local governments over the next two years, the ARP provides funding streams to states for a variety of purposes. These include education relief funding, emergency rental assistance, child care and CCDBG, Head Start, urban transit relief, rural transit support, and expanded coverage for the Medicaid population.
These additional funding streams associated with the ARP are identified above to provide cities with additional details about the funds Oregon will receive. While details on the state’s plan for distribution of these funds are not yet available, it’s clear additional help is coming to Oregon and is not part of the state’s direct $2.6 billion payment. Some of this funding detail will be known once the 2021 session is complete. It’s important to see the other-fund distribution, because when cities are determining where to invest their share during their budgeting process, they should avoid duplicating funding if other sources from the state via ARP are being funded. The next level of detail is currently in process and will provide a better understanding of how the state plans to allocate these additional funds.
Governor Brown’s 10-Point Plan – Post Session
Governor Brown released her 10-point economic plan on March 23. The plan is intended to provide recovery investment to assist in pulling Oregon out of the economic catastrophe many communities and businesses face. The 10-point plan provides investments in the following areas:
- Investing in Oregon’s hardest hit workers (those currently unemployed or underemployed).
- Reinvesting in innovative housing.
- Supporting resilient rural communities.
- Supporting Oregon’s workforce (those currently employed but struggling).
- Creating opportunities for Oregonians (workforce development).
- Getting small business back on its feet.
- Investing in Oregon’s infrastructure.
- Oregonians investing in Oregon.
- Safely reopening Oregon’s economy.
- Innovation in manufacturing.
Details on funding and the different focus areas of the Governor’s plan are not available at this time. What’s important to understand is that this plan is dependent upon three different funding sources: funds from the ARP distribution; funds in the Governor’s Recommended Budget; and legislative actions yet to be taken by the Legislature. A full understanding of the details or the extent of funding committed won’t be possible until the 2021 session has been completed by June 27.
The Take-Home Message for Cities
The elements of this article are intended to provide cities with resources for evaluating investment options over the next few years. The generational support provided with the direct ARP funds will benefit cities across Oregon. What’s important for each city’s decision making is consideration of other revenue streams as discussed above. Cities are urged to expand their investment considerations through discussions with other local government partners. These conversations could generate opportunities to leverage investments on projects and programs that could have dramatic value for all communities.
Contact: Jim McCauley, Legislative Director - jmccauley@orcities.org
Last Updated 4/9/21
Related Resources
- American Rescue Plan Resource Hub
- Last American Rescue Plan News
- ARP Payments - Here's What We Know LOC Bulletin (3/26/21)