Budget Blog

Governors Begin Proposing Uses of American Rescue Plan Act Funds

By Brian Sigritz posted 06-01-2021 11:23 AM


The American Rescue Plan Act (ARPA) of 2021 was signed into law by President Biden on March 11. The bill includes $350 billion in emergency funding for state, local, territorial, and Tribal governments. These State and Local Fiscal Recovery Funds are to remain available until December 31, 2024. The legislation details certain eligible use of the funds including responding to the public health emergency or its negative economic impacts, providing premium pay for essential front-line workers, replacing revenue losses due to the COVID-19 public health emergency, and necessary investments in water, sewer, or broadband infrastructure. Meanwhile, restrictions include using the funds to either directly or indirectly offset a reduction in net tax revenue or depositing the funds into any pension fund. Governors’ initial plans for spending ARPA funds have included: continued efforts to address COVID-19; economic recovery and relief; public health and other health initiatives; education; workforce training; promoting economic development and tourism; bonuses for first responders; shoring up the Unemployment Insurance Trust Fund; housing assistance; and infrastructure including broadband, water, and sewer.

Below are examples of governors’ plans for spending ARPA funds with links to further information. Many governors’ proposals were released before May 10th when the U.S. Treasury Department provided information concerning allocations and details on how funds can be used to respond to acute pandemic needs, fill revenue shortfalls, and support communities and populations hardest-hit by the COVID-19 crisis. Additionally, the Treasury Department is seeking comments through July 16th on its interim final rule implementing the Coronavirus State and Local Fiscal Recovery Funds.

    • Alaska Governor Mike Dunleavy said his proposed allocation of federal American Rescue Plan funds is intended to assist and mitigate economic fallout from COVID-19. The governor also noted he will work with the legislature to refine appropriations as additional guidance is provided by the federal government. The governor’s proposed allocations are directed towards protecting Alaskans including emergency response costs and individual security; Alaska tourism revitalization; economic recovery and innovation; infrastructure investments; and a general fund offset. (April 16)

    • Colorado Governor Jared Polis, along with members of the legislature, congressional delegation, and the state treasurer, announced how the state plans to use federal funds from the American Rescue Plan. The governor said the state must use the once-in-a-generation opportunity to invigorate the economy, help the state recover faster and stronger, and make critical investments to better the state for future generations. The governor said the federal funds will be directed to fortifying the state budget and maintaining fiscal integrity; the ongoing response to the COVID pandemic; affordable housing and homeownership efforts; mental health and behavioral health programs; workforce development and education; economic recovery and relief; transportation and infrastructure; and parks and agriculture. (May 24)

    • Connecticut Governor Ned Lamont stated he developed his proposal with the goal of ensuring the state’s recovery efforts are oriented toward transformative initiatives that enable Connecticut to emerge from the COVID-19 pandemic stronger, healthier, and ready to resume the progress that made the state a leader in many areas and a desirable place to live. The governor’s proposal makes investments in five key areas: defeating COVID-19; investing in the future; creating a more affordable Connecticut; economic growth that works for all; and modernizing state government. (April 26)

    • Florida Governor Ron DeSantis’ recommendations for utilizing a portion of federal funds the state is expected to receive through the American Rescue Plan include providing assistance to Floridians in need, making major investments in critical areas such as infrastructure, education, and workforce development to continue the state’s rapid economic recovery. The governor’s budget recommendations to the Florida legislature regarding the use of ARPA funds are: providing assistance to Floridians including direct payments to pandemic first responders; promoting economic development and recovery; investing in infrastructure, resiliency, and readiness; and workforce training and research. (March 16)

    • Kentucky Governor Andy Beshear joined legislative leaders from both parties to sign bipartisan legislation appropriating funds from the American Rescue Plan Act to create jobs, build better schools, repay federal unemployment insurance trust fund advances, expand broadband and invest in infrastructure, including clean drinking water. The governor noted that everyone was able to put politics aside and capitalize on a once-in-a-lifetime opportunity to invest in Kentucky’s people and its future. (April 7)

    • Louisiana Governor John Bel Edwards said by investing American Rescue Plan dollars wisely, the state can shore up its unemployment insurance trust fund and avoid businesses paying higher taxes, continue to chip away at Louisiana’s backlog of infrastructure projects, support the tourism industry, and improve aging water infrastructure. The governor stated that his priorities for the funding are shoring up the Unemployment Trust Fund; an Unemployment Insurance loan payment; infrastructure; water and sewer systems; tourism and convention and visitors bureaus; the Department of Culture, Recreation, and Tourism; and Louisiana Ports. (April 29)

    • Maine Governor Janet Mills stated that federal funding from the American Rescue Plan represents an unprecedented opportunity to make historic investments in unaddressed needs and tackle longstanding challenges. The governor’s plan is focused on three goals: immediate economic recovery from the pandemic; long-term economic growth for Maine; and infrastructure revitalization. To help promote long-term economic growth, the plan focuses on efforts to make strategic investments for future prosperity, as well as expand and strengthen Maine’s workforce. Regarding infrastructure revitalization, the recommendation includes initiatives directed at building out family infrastructure, investing in transportation investments, investing in outdoor recreation and marine resources, supporting essential drinking and wastewater projects, facilitating energy needs, and modernizing state technology. (May 4)

    • Maryland Governor Larry Hogan, along with the Senate President and House Speaker, announced a bipartisan agreement to allocate federal funding the state expects to receive through the American Rescue Plan Act. The major components of the agreement to provide targeted relief are: shoring up the state’s Unemployment Insurance Trust Fund; supporting existing state efforts to provide pandemic relief; supporting the safe reopening of Maryland schools; improving transportation services and infrastructure; major investments in broadband technology; supporting critical lifelines for Marylanders in need; funding for a variety of apprenticeships and employment training programs; and supporting state employees providing essential services. (March 31)

    • Michigan Governor Gretchen Whitmer said her key priority areas for investment have sustainable and long-term benefits, noting the state has a once-in-a-generation opportunity to invest billions towards Michigan families, communities, schools, and small businesses. Her priorities include job creation, infrastructure, access to health care, and children and their education. (April 12)

    • Nevada Governor Steve Sisolak said the state will focus its efforts on a comprehensive approach directed towards individuals and families. He noted his proposed framework will prioritize the expenditure of funds to creating a successful recovery and a stronger Nevada for future generations. The governor said the funds will be prioritized in the areas of Nevadans health and safety; strengthening resources for community support and education access; building a strong economy; and improving the quality of life for all Nevadans. (April 1)

    • North Carolina Governor Roy Cooper released recommendations on how the state can most effectively invest in its recovery through the American Rescue Plan, noting the funds offer a once-in-a-generation opportunity to invest in North Carolina and ensure a shared recovery from the global pandemic. The governor’s recommendations for the funds include: closing the digital divide; expanding access to affordable education including scholarships and other financial aid; water and wastewater infrastructure investments; reconnecting the workforce including increasing access to education and training, and addressing housing needs; hospitality industry business assistance and recovery grants; helping to build a sound basic public education; and increased grants to low- and middle-income families with children. (May 19)

    • Oregon Governor Kate Brown said the state can lift up Oregon families and businesses by investing state and federal resources to help recover from the devastating economic impacts of the COVID-19 pandemic. The governor detailed a 10-point plan aimed at creating an equitable and rapid economic recovery. The plan includes investing in Oregon’s hardest hit workers; reinvesting in innovative housing; supporting resilient rural communities; supporting Oregon’s workforce; creating opportunities for Oregonians; getting small business back on its feet; investing in Oregon’s infrastructure; Oregonians investing in Oregon; safely reopening Oregon’s economy; and innovation in manufacturing. (March 23)

    • Vermont Governor Phil Scott said with the passage of the American Rescue Plan the state has an unprecedented opportunity to strengthen the state’s economy and communities through significant investments in one-time ARPA dollars. He noted his proposal outlines five major buckets: economic development; climate change; water/sewer infrastructure; housing; and broadband/telecom. (April 6)

    • Virginia Governor Ralph Northam released a joint statement with leaders of the House of Delegates and the Senate of Virginia outlining shared plans and priorities for the distribution of federal assistance the state expects to receive through the American Rescue Plan. The leaders noted this is a unique opportunity to invest in Virginia’s long-term future. The governor and legislative leaders listed five specific needs for the funds: helping public health, small businesses, workers, public schools, and fully deploying broadband across Virginia. (May 12)

    • Wyoming Governor Mark Gordon announced plans to strategically utilize American Rescue Plan federal funds. The governor noted the state will be laser-focused on addressing Wyoming’s short and long-term recovery, and on getting people back to work. The areas of focus for the funds are health and social services, education and workforce, and economic diversity and economic development. The governor said the state is working to identify both short and long-term priorities within each area of focus, and unlike previously received federal relief funds, ARPA funds do not need to be immediately spent. (May 17)