What Are ARPA Funds and How Do They Affect Your Local Government?
The American Rescue Plan Act (ARPA) provides federal funding to states, local governments and Tribal governments in order to address the mismatch between rising costs and shrinking revenues. Of this $130.2 billion total allocation, $130.2 billion are designated specifically for local government via Local Fiscal Recovery Funds.
Eligible local government units must submit their requests through the U.S. Department of Treasury’s Submission Portal webpage.
What are ARPA funds?
ARPA funds are the economic stimulus provided by the American Rescue Plan Act. These resources are a one-time opportunity to turn around the COVID-19 pandemic and create a path forward towards equitable recovery.
These resources aim to address both the immediate and long-term impacts of the pandemic on individuals, households, businesses, and communities. Furthermore, they will assist local governments in recovering and rebuilding.
For instance, the American Rescue Plan Act allocates $350 billion in emergency funding for state, local, territorial and Tribal governments to address the mismatch between rising costs and declining revenues. Of this amount, $130.2 billion is designated specifically for local government in a program known as Local Fiscal Recovery Funds (SLFRF).
ARPA funding offers local governments an exceptional chance to make strategic investments in long-term assets, build reserves and cover temporary operating shortfalls until financial conditions normalize. It is critical that they use these funds wisely and prudently in order to maintain strong financial condition as well as sustainable operating performance for years into the future.
What are the eligibility requirements?
The American Rescue Plan Act (ARPA) allocates federal funds to states and local governments through the State and Local Fiscal Recovery Funds (SLFRF). This page will explain how this money affects your local government, including eligible uses of revenues, spending patterns, and reporting obligations.
The ARPA extends the Child and Dependent Care Tax Credit (CTC) to 50% of up to $8,000 in expenses per child or $16,000 for two or more. Furthermore, it extends eligibility for this credit until 2021 and permits advance payments based on your 2021 tax return.
In addition, the ARPA expands marketplace subsidies to assist those who have had difficulty affording health insurance due to COBRA or an employer-sponsored plan, or because of involuntary termination or reduced hours. Individuals whose incomes reach 600% of poverty may qualify for these subsidies; however, eligibility is not guaranteed.
Can ARPA funds be used for technology?
Some cities are using ARPA funds to improve online government services and enable remote meetings. For instance, city leaders in Clintonville, Wisconsin are investing in new hardware that enables them to work from anywhere.
Virginia will invest $20 million on digitizing health records; Colorado allocated $35 million towards digital inclusion programs; and Indiana plans to invest $1 million into an “internet of things” laboratory. These initiatives are part of a broader drive to invest in technology.
The federal government’s $350 billion American Rescue Plan Act (ARPA) funds provide local governments with a unique opportunity to build the technology infrastructure needed for pandemic recovery. Public-sector organizations can utilize these funds to upgrade aging on-premise systems to more reliable, secure, flexible and dynamic cloud solutions by taking advantage of proven migration models from experienced business application providers.
Can ARPA funds be used for infrastructure?
Within the first 10 months of the ARPA Act, communities were given the freedom to prioritize and invest their portion of $350 billion in State and Local Fiscal Recovery Funds (SLFRF) dollars. As Treasury Department representatives have noted, local leaders have numerous options for using these resources in response to both COVID-19 pandemic and its underlying challenges that compounded its effect on them.
ARPA funds are being allocated for a variety of projects, such as training workers, construction of affordable and middle-income housing, increasing shelter beds, supporting clean drinking water projects for homeowners and communities, weatherizing homes to reduce energy costs, expanding broadband coverage statewide – and much more.
As part of its commitment to transparency, the Administration is providing updates on its ARPA fund usage with Vermonters through the results for America tracker and results reports. Furthermore, we are working closely with partners to showcase creative, evidence-based local uses of ARPA funds that demonstrate best practices.