State & Local Funding from the American Rescue Plan

The following was written by GP McLeer, Executive Director of the SC Arts Alliance, and Mayor of Fountain Inn, SC. It has been edited to reflect information specific to Texas and Texans for the Arts. 

 

On March 11, President Biden signed into law the American Rescue Plan (ARP), a $1.9 trillion package.

In the CARES Act of 2020, the state, and cities, and counties with populations over 500,000, saw direct relief funding.

But the ARP provides $350 billion for state and local governments – every state and local government.

For Texas, that means almost $48.8 billion is estimated to flow into diverse agencies of government across the state. State fiscal relief will be $16.7 billion. Local including counties and municipalities will secure $10.4 billion. Elementary and Secondary School Emergency Relief Fund will receive $12.4 billion. Higher Education Emergency Relief Fund will receive $3 billion and Child Care and Development Block Grants and Child Care Stabilization Grants will receive $ 4.4 billion. 

 


TEXAS MUNICIPAL LEAGUE: Impact on Texas Counties and Cities 

 

How much funding?

State and Local Allocations

 

Interactive map of allocation data. 

 


This funding is more flexible than CARES Act funding for governments – which offers opportunities, and challenges, for arts funding. The four allowable uses for funds are:

  • Respond to the COVID-19 public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality.
  • Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.
  • Provide government services to the extent of the reduction in revenue due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency.
  • Make necessary investments in water, sewer or broadband infrastructure.

 Note: States cannot attach additional requirements on local governments.

Important Note: We are waiting on the US Treasury to issue final guidance on how these funds can be spent, which is expected in early/mid-April.

 

GFOA - the Govt Finance Officers Association - has issued some guiding principles ahead of full Treasury guidance around local ARP funds. This is a pretty good tool for folks not in Govt finance to help understand how funds will probably be structured and accounted for with some good guard rails to keep in mind on how governments will approach funding. GFOA offers certificates in financial reporting and is the gold standard of government finance best practice. 

When does this funding hit? The federal government has 60 days from March 11 to send money to each entity. States, counties, and cities with populations over 50,000 will get their funds directly from the federal government. Smaller cities/towns will have their money sent to them through the state within 30 days of the state receiving those funds. Governments can spend these funds through 2024.

What about the arts? The first allowable use of funds – responding to negative economic impacts – fits the arts in every way, especially given the focus on tourism, travel, and hospitality. This guidance is for every level of government, meaning arts groups could see relief from their city, county, and the state. 

 Our concern lies in the flexibility of the funds. For example, infrastructure improvements (water/sewer/broadband) could eat up a lot of local funding, as could funding revenue reductions. Local advocacy from you, our advocates, will be vital.