American Rescue Plan
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law. The $1.9 trillion package, based on President Biden’s American Rescue Plan, is intended to combat the COVID-19 pandemic, including the public health and economic impacts. Included within this plan is a program called the Coronavius State and Local Fiscal Recovery Fund (CSLFRF or SLFRF) which is a direct allocation of $350 billion to over 19,000 state, county, city, town, village, and Tribal governments across the United States.
In May of 2021 the U.S. Treasury issued an Interim Final Rule which stipulated how these funds were to be spent as well as record keeping and reporting requirements. Moreover, this initial rule include four distinct categories for expending these funds:
- Support public health expenditures and address address negative economic impacts caused by the public health emergency by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff, and by providing aid to impacted workers, households, small businesses, impacted industries and the public sector.
- Replace lost public sector revenue by expending CSLFRF on general government services using either the $10 million standard allowance, or the formula approach, whichever is higher.
- Provide premium pay for essential workers performing essential work during the COVID-19 public health emergency.
Following several months of public review and modifications the U.S. Treasury issued a Final Rule on January 6, 2022. The Final Rule makes several key changes to the Interim Final Rule, including expanding the eligible uses of CSLFRF and easing the administrative burden for some program requirements. Treasury’s Overview of the Final Rule helps summarize the substance of the Final Rule.
The most significant change in the final rule is what is known as a standard allowance. This standard allowance allows the Town to claim up to $10 million in lost revenue. This is a critical difference as it provides the Town the ability to use these funds to provide general government services. That is, most of what local governments are already authorized to do (e.g. parks and recreation, construction projects, etc.). Prior to this the Town would have had to prove it lost revenue due to the pandemic to use these funds for general government services.
To learn more about Mills River's allocation of this large funding pie please use the links below.