New Analysis of State ARPA Fund Allocations Based on Recovery Plans

By Kathryn White posted 10-18-2021 01:44 PM

  

Today, NASBO released a new issue brief examining states’ processes for allocating Coronavirus State Fiscal Recovery Funds, authorized by the American Rescue Plan Act of 2021, and planned uses of these funds. This analysis is based strictly on what states and territories reported to the U.S. Treasury Department in their Recovery Plan Performance Reports, which were due on August 31, 2021. To date, NASBO has compiled links to recovery plan performance reports for 39 states, the District of Columbia, and two territories.

The brief presents a high-level look at how states are making decisions about the use of these funds, how this process differs from states’ experiences with Coronavirus Relief Funds (CRF) authorized by the CARES Act in 2020, and the varying timelines states are on for allocating fiscal recovery funds. The majority of the brief focuses on states’ planned uses of these funds, as reported in their recovery plans.

According to this analysis, the median percentage of funds allocated for those states with publicly available recovery plan reports was 41 percent for the reporting period covered in these plans. Additional key findings include:

  • At least 31 out of 39 states reported some allocations of their fiscal recovery funds for specific uses.
  • 16 out of 39 states reported allocating at least 50 percent of their total state fiscal recovery fund payment.
  • Revenue Replacement has so far claimed the largest share of total funds allocated, at 32 percent, followed by Negative Economic Impacts at 27 percent.
  • Infrastructure (broadband, water and sewer projects) follows at about 16 percent, with Services to Disproportionately Impacted Communities making up roughly 15 percent of total funds allocated.
  • Public Health comprises most of the remaining funds allocated, at 9 percent.
  • Only a few states so far have indicated plans to use ARPA Fiscal Recovery Funds for Premium Pay, and a few states have specifically allocated funds for administrative and other purposes.

 

Among the states that did not report on specific planned uses of funds in their recovery plans, most indicated that they would be making some fund allocations this fall and/or during 2022 legislative sessions. Some states that have already allocated a portion of their Fiscal Recovery Funds noted they intend to consider additional uses as part of their state’s fiscal 2023 budget development process. NASBO will continue to monitor and report on state budget actions to allocate this funding in the months (and years) ahead.

Click here to read the full issue brief, which also highlights numerous state examples to illustrate the range of planned uses of these funds to foster a robust recovery and support the short-, medium- and long-term needs of the states.