about the american rescue plan

On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), which includes $350 billion for state and local governments to pay for much-needed investments to respond to the COVID-19 pandemic and to begin to build back stronger communities.

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OVERVIEW

The American Rescue Plan (ARP) has distributed $130 billion in payments to local governments to assist in the economic recovery from the COVID-19 pandemic. Payments were calculated by need and population size. While there is flexibility in using the funds, local governments must follow Treasury Department guidance when deciding where to spend funds. The COVID-19 pandemic has impacted low-income people and Black, Indigenous, and other people of color (BIPOC) more than others due to structural inequalities. Local ARP funds should be used to advance equitable economic development that ensures people have what they need and that barriers to opportunity are removed so communities can get to greater resiliency and well-being.

BACKGROUND

​In March 2021, Congress passed the American Rescue Plan Act, which spent $1.9 trillion to revitalize the economy and help it recover from the pandemic. The ARP included direct payments to U.S. citizens, expanded Child Tax Credits, and $350 billion in aid to local and state governments. $130 billion went to metropolitan areas, counties, and non-entitlement governments. Payments to local governments began in May 2021.  

Governments will receive ARP funds in two dispersals, one this summer and one in about 12 months. ARP funds can be used to support public health and address negative economic impacts caused by the health emergency as well as to replace lost public sector revenue, provide premium pay for essential workers, and invest in water, sewer, and broadband infrastructure. The above categories are broad enough to allow local governments flexibility in allocation. Each category has room to account for equity and to encourage equitable development. This is intentional in the design of the American Rescue Plan, as one of the policy objectives in treasury guidance to local governments is to “address systemic public health and economic challenges that have contributed to the unequal impact of the pandemic.”

While past stimulus packages, such as the CARES Act, were aimed at immediate assistance and relief during the pandemic, ARP provides a stimulus aimed at recovery. ARP funds are meant to be used strategically. Local governments should focus on spending to address existing inequities and create equitable development in the post-pandemic economy.

DEFINITIONS

EQUITY: Equity means the presence of fairness and justice. This is different than equality, which implies things are equal, or the same. Equality means there is equal standing and value, while equity means that there is mutual interest in just outcomes. In policy, equity can be a more useful tool than equality. It would hardly be fair to tax all incomes at the same amount, which meets the criteria of equality. This is why there is a progressive income tax structure, where people with higher incomes pay more in taxes.(1)   

ECONOMIC DEVELOPMENT: Economic development is a broad framework, and while it is difficult to agree on a single definition, “Economic Development: A Definition and Model for Investment” provides the following helpful explanation: “Economic development is the expansion of capacities that contribute to the advancement of society through the realization of individual, firm and community potential. … Economic development is essential to creating the conditions for economic growth and ensuring our economic future.”(2)   

EQUITABLE ECONOMIC DEVELOPMENT: Equitable economic development applies the concept of equity to economic development. It recognizes a history of underinvestment, discrimination, and devaluation of underserved communities, and it encourages investment and attention to their economic futures.

USING ARP FUNDS TO ADVANCE EQUITY

There is a myth that natural disasters like the COVID-19 pandemic do not discriminate and are blind in their effects, but existing inequities have exacerbated the negative economic, health, and social impacts of the pandemic. During the COVID-19 pandemic, BIPOC communities — especially Black communities — have experienced greater negative social, health, and economic fallout because of entrenched racist policymaking. Previous eras of government spending following an economic or physical disaster, such as the New Deal, G.I. Bill, and the bank and auto industry bailouts during the Great Recession have aided institutionalized powers instead of assisting under-served populations and have often harmed those most in need. Stimulus checks provide short-term relief but do little to address the underlying systemic issues. Economic recovery efforts should address the institutionalized inequities to foster equitable economic development, which would build more resilient economies and reduce the risk of future economic disasters. Furthermore, lessons from the CARES Act demonstrate the need for governments to create infrastructure for the equitable use of resources. As an example, the CARES Act funds were under-accessed and under-utilized by minority owned businesses despite the intentions of Congress because robust networks of financial institutions, technical assistance, and other groups were not in place to reach, facilitate, and ensure the engagement of these firms that are essential to jobs and wealth building in so many communities.

GUIDANCE AND VALUES FOR EQUITABLE SPENDING OF ARP FUNDS

According to the Treasury Department, one of the purposes of providing these funds is to “address systemic public health and economic challenges that have contributed to the unequal impact of the pandemic.” In further guidance on compliance and reporting, the Treasury makes clear that putting community feedback and engagement at the center of determining allocations is necessary for the equitable use of funds.

While the Treasury affords flexibility in local ARP spending to allow diverse local needs to be met, there is also a risk of disparate geographic impacts within states and counties due to different approaches to spending ARP funds. Thus, local government officials should adopt values promoting the equitable use of ARP funds while engaging directly with community stakeholders to maximize benefits to their communities. Sources offering guidance and values are listed below.

U.S. Treasury Guidance: The U.S. Treasury has issued guidance on how funds can be used. At the broadest level, local governments must comply by using their ARP funds to support public health expenditures, address negative economic impacts of the public health emergency, replace lost public sector revenue, provide premium pay for essential workers, and invest in water, sewer, or broadband infrastructure.

In compliance and reporting guidance, the Treasury underlines that equity includes listening to impacted communities in addition to serving them. In the required “Recovery Plan Performance Report” for governments of populations over 250,000, local officials must report on community engagement. Local allocations must reflect the diverse feedback of stakeholders in the community.

National League of Cities: The National League of Cities (NLC) developed 5 guidelines for ARP uses: assessment of government and community needs; strategic use of revenue sources; prioritization of fiscal stability and returning to work; maintenance of records and documenting impact; and engaging with congressional delegations.

Southern Economic Advancement Project: The Southern Economic Advancement Project (SEAP) outlines key values for an equitable recovery: community input, accountability, and measurement. SEAP has designed an ARP toolkit to assist local governments in making decisions on how to use ARP funds equitably. In addition, SEAP has issued community engagement guidance for making local ARP allocations

STRATEGIC CONSIDERATION IN ARP SPENDING

ARP funds dispersed to local governments are meant to be used strategically. These funds are not meant to offset only the cost of responding to the pandemic; they are meant to help economies recover from it. Local governments must make the following strategic considerations before deciding how to use ARP funds to maximize equitable outcomes.

Infrastructure spending: Many local governments are planning to use one-time ARP funds to make much-needed updates to local infrastructure. Projects include spending on increasing broadband access and updating water infrastructure. A high-profile $579 billion infrastructure bill has been in the works in Washington since the start of the Biden administration, and although it has hit roadblocks on its way to becoming law, it does have bipartisan support. The infrastructure bill includes money for both broadband and water projects, which are included in allowed projects for ARP spending. Local government decision-makers should understand the provisions of this bill and how it might benefit them. They should understand where it might overlap with ARP provisions and then assess the urgency of their infrastructure needs.

Other ARP funding: The $130 billion funding to local governments is only a fraction of the massive ARP Act, which spends $1.9 trillion in total. Other pots of ARP money will be available to support local government needs and services. Before seeking to fund new activity, local government officials should ensure they are maximizing other routes of funding. Identifying strategic sources of funding will allow local governments to support as much activity as they are able. The National League of Cities has put together a database of ARP Act provisions as a resource.

Impacted communities: Local governments should consider who will be most helped by ARP spending in their communities. They should identify who bore the greatest burden of the pandemic and who will need the most assistance in pursuing an equitable economic recovery. This includes people already experiencing economic inequality: Those living in poverty, rural communities, and BIPOC communities. ARP funding should aim to create equitable economic development for these communities, so they are less vulnerable to future disasters.

Timeline: ARP funds are a one-time investment that will arrive in two dispersals in 2021 and 2022. Since the funding has an end date, local government decision-makers cannot use the money as the sole source of funding for a new, ongoing program. Funds are better suited for short-term or one-time investments.

TRENDS IN EQUITABLE ARP USES

Comprehensive recovery packages: Larger cities and metropolitan areas are proposing using ARP funds to support comprehensive recovery packages with money set aside for a wide range of investments that target both government recovery and community economic recovery. Packages are often multi-faceted and far-reaching, addressing the socio-economic needs that have to be met to spur equitable economic development. Santa Ana, Calif., is using $142.9 million to launch its “Revive Santa Ana” program with five focus areas: COVID-19 recovery, assistance programs, homelessness, critical infrastructure, and city fiscal health. Alexandria, Va., is using its funds for the city’s strategic recovery framework, focusing on its recovery goals: businesses thrive, everyone has access to the basics, recovery lifts everyone, and long-term community investment. However, this type of spending proposal is unrealistic for smaller cities, towns, and counties, where they must address the needs of a smaller population with fewer funds.

Investments in local social services: Some cities are investing in their local safety net to support vulnerable populations that have experienced the negative effects of the pandemic disproportionately. Nashville, Tenn., is putting around $20 million from its ARP funds toward two affordable housing funds to address rapidly rising home prices. Richmond, Va., city council members requested that $7.1 million of the city’s anticipated $160 million ARP funds be earmarked for the city’s Affordable Housing Trust Fund to address the city’s high prepandemic eviction rates and homelessness. Other cities are piloting guaranteed income initiatives. The NLC identified that Seattle, Wash., Mountain View, Calif., and Minneapolis, Minn., all have included guaranteed income pilots in their comprehensive recovery plans. Such initiatives address income inequalities for low-income individuals and households, who are most vulnerable to the economic impacts of the pandemic. Social service programs that increase economic stability by relieving housing and income insecurity can set the stage for equitable economic development in the wake of the pandemic.

Updating infrastructure: Many local governments, such as Haywood County in North Carolina, are focusing on infrastructure investment, specifically the stormwater and broadband provisions in the ARP guidance from the U.S. Treasury. Access to broadband is linked to positive health and social outcomes. Despite the ubiquity of digital life, millions in the U.S. remain without broadband access, particularly in low-income and rural areas that already experience inequitable economies. Investment in broadband access is an opportunity to create greater economic equity and bring those left behind into the digital fold.

Updates to water and sewer infrastructure may seem like issues that will affect everyone in a community equally; however, low-income communities and communities of color are more likely to experience unsafe drinking water and flooding, leading to both physical and economic displacement. Investing in infrastructure in vulnerable communities can lead to greater stability and economic development over time. Many local governments have identified weaknesses in their infrastructure and will spend ARP funds to improve these systems. Several coastal North Carolina towns will be directing their funds to stormwater projects to amend ongoing infrastructure issues. Local governments should be aware of the infrastructure bill in development in D.C. so they can spend federal dollars most effectively.

Community involvement: Many local governments have already made plans to engage their citizens in using ARP funds. For example, in Greensboro, N.C., the city is asking for citizen input via an ARP Spending Simulator. Other cities, like Youngstown, Ohio, are soliciting community feedback through community stakeholder surveys. Community input is necessary to correctly assess needs and to administer ARP funds in ways that foster equitable development. However, governments must ensure that engagement is meaningful and be intentional in their outreach to vulnerable and hard-to-reach communities.(3)

LIMITATIONS OF EQUITY IN ARP FUNDS

Limits of targeted action: Local government officials can target spending in low-income census tracts; however, this targeted action is limited to health and housing initiatives. Some officials want to use funds to create transformational change by looking at broader projects, such as building community centers or markets to respond to food deserts in low-income areas.

Funding is a one-time investment: ARP funds are a one-time revenue source. This means that, while the money can help to launch new programs, it cannot fund recurring projects or expenses.

Challenges for rural populations: ARP funds dispersed to local governments are proportional to population and need. Rural areas with high rates of people experiencing poverty have smaller populations but may need more spending on high capital infrastructure projects and may have greater infrastructure needs in general due to consistent underfunding.

Limitations for tourism-dependent places: Places that rely on tourism but have small local populations, such as in eastern North Carolina, may receive less ARP funding and be unable to invest in projects that support tourism capacity. For example, the Village of Bald Head Island in North Carolina has a population of around 200 fulltime residents but hosts over 8,000 tourists in peak summer months. The funding received is meant to support the capacity of the local population, not the impacts of the tourism industry.

SOURCES

1. This definition is based on the definition of equity from the Encyclopedia of Social Justice and Diversity.
2. Feldman, Maryann, et al., Economic Development: A Definition and Model for Investment.
3. SEAP has developed guidance on community engagement in the ARP spending process, click here for more information. 

 — Written by MEGAN DAVIS, Budget & Tax Center Intern 

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case studY

COMMUNITY ENGAGEMENT STRATEGIES FOR EQUITABLE DEPLOYMENT OF AMERICAN RESCUE PLAN FUNDS

The federal response to COVID-19 has proven that public investments can play an important role in minimizing the economic and public health harms of a global pandemic and downturn. 

The Center on Budget & Policy Priorities has documented the anti-poverty and protective forces of several supports that were delivered to individuals and families alongside investments that were made in public institutions and communities during the COVID-19 pandemic.[1] Many of these supports delivered powerful anti-racist outcomes — the expansion of the Child Tax Credit, for example, narrowed the Black/white and Latinx/white poverty gaps by an estimate of more than 40 percent.[2]

The American Rescue Plan (ARP), which passed in March 2021, had additional funding streams that could further the goals of building more resilient communities by dismantling barriers to opportunity for those who historically have been excluded. ARP funds could also build resilience by providing targeted support to the individuals and neighborhoods that have been hardest hit by the pandemic. One such funding stream includes the Fiscal Recovery Funds, which were an unprecedented move by the federal government to shore up the capacity for state and local governments to respond to needs on the ground across the nation.

The ARP’s State and Local Fiscal Recovery Funds are just beginning to be deployed by states and local communities.[3] These federal funds have the potential to drive more equitable outcomes if decision-makers prioritize community engagement and emphasize the lessons gathered from community input.  

Why community engagement?
The ARP legislation and its associated rules have made clear that the intent is for government leaders to engage the community in decisions around allocating funds. The U.S. Treasury specifically provided governments with this guidance: “to engage their constituents and communities in developing plans to use these payments.”[4]

For communities with populations more than 250,000, the reporting requirements include questions regarding the level of engagement. “… Describe how your jurisdiction’s planned or current use of funds incorporates written, oral, and other forms of input that capture diverse feedback from constituents, community-based organizations, and the communities themselves. Where relevant, this description must include how funds will build the capacity of community organizations to serve people with significant barriers to services, including people of color, people with low incomes, limited English-proficient populations, and other traditionally underserved groups.”[5]

Local governments and other leaders who are responsible for disbursing funds must prioritize robust and inclusive community engagement. This is an unprecedented scale and flexibility of ARP funding, and the challenges presented by the pandemic’s disparate health and economic impacts — coupled with systemic underinvestment and exclusion from investment — are best solved by including diverse perspectives.

The evidence is clear that community engagement leads to better outcomes, more efficient and effective investments, and broader public support for the solution over time.[6]

How to engage the community in the American Rescue Plan?
There are several ways to engage the community in allocating ARP funds, both from within and outside local government. From either perspective, it is important to be clear upfront about whether this engagement is intended to inform, involve, or collaborate and how the input provided will be used to develop or decide on solutions.

The approach to engagement will vary depending on the capacity and tools of the community and other factors. However, equity should be a cornerstone of engagement. Local governments and advocates can gain important insights on the issues and the necessary features of successful investment by seeking out the groups who historically have not been included in decisions but who have been impacted the most by the pandemic.

The American Rescue Plan Final Rule provides guidance for engagements based on income, demographics, and the disproportionate harm of the pandemic. Ensuring that your engagement strategy reaches into the hardest-hit communities can be supported by data on Qualified Census Tracts (QCTs), a key neighborhood measure of need in the ARP rules.

Trusted institutions with relationships in the hardest-hit communities can provide an important connection to bring more people into the process. Engaging with these institutions to conduct information gathering and sharing and to co-develop plans for advancing investment proposals is an effective strategy used by communities across the state and nation.

Community Engagement Tools
  • A Model Resolution like the one developed by the Southern Economic Advancement Project can set clear expectations for decision-making regarding the funds.
  • Online surveys of residents like those developed by the City of Durham can provide opportunities for people to share their priorities and identify needs in their communities.
  • Simulators like those developed in the City of Greensboro provide an opportunity for residents to allocate funds to their priorities and to experience the decision-making process in real time with visual aids. Residents can also submit allocations to decision-makers to help inform the process.
  • Public hearings like those conducted in the City of Fayetteville are another tool used to gather community input. These hearings could be hosted by local governments, in collaboration with community organizations, or connected to regular community meetings.
The process of community engagement doesn’t stop with gathering information. Local governments and advocates must continue to share information and communicate how they will use community input in their decision-making. Communities can also provide important information as investments flow about the impact and outcomes resulting from these programs and services.

Community engagement in allocation decisions
Local communities have until December 2024 to allocate Local Fiscal Recovery Funds and until December 2026 to spend the dollars. However, early models are emerging for ways that local governments and communities are pushing community priorities to the forefront of funding decisions in North Carolina and across the nation. Here are some notable examples:  

North Carolina
  • Both the City of Durham and Buncombe County used Requests for Proposal processes to gather ideas from organizations and agencies in the community about how to allocate funds. The guideline for the Buncombe County process can be found here. Request for Proposal processes are often used for a subset of total resources and are best designed with clear criteria, alignment to community-defined goals, and support for organizations or institutions that may not previously have participated in a government contract process.
  • A notable shift in approach took place in Pitt County when the Board of Commissioners paused funding decisions to seek community input after objections from the community. In this case, the efforts of local advocates who showed up to meetings and talked about the range of needs in their communities was an effective way to seek public input before the county commissioners decided how to use funds.[7]

National
  • Charleston, West Virginia, established an advisory council of residents who are charged with making recommendations regarding the allocation of funds to priorities. [8] 
  • New Orleans, Louisiana, adopted a model resolution on the community engagement process and established a stimulus task force charged with deciding the allocation of funds.[9]
  • Lexington, Kentucky, created a clear framework for priorities to be funded with ARP dollars and encouraged full participation from the community through language access at meetings and with materials. In addition, the city has communicated back to community members with quarterly reports and an accessible dashboard on funding decisions.[10]
  • In Gainesville, Florida, leaders use the goals from their racial equity plan to guide decisions around ARP allocations. City leaders can build from the foundation of engagement that was created in developing this framework and connect the dots to previously identified systemic investments.[11]

Early lessons learned
  • Leveraging existing community input processes or community-driven recommendations is proving to be an efficient way to get more people engaged in the process and to follow the evidence around previously identified needs and solutions. This engagement could include using a Health Equity Assessment to drive ARP recommendations for a stronger network of healthy food options in high-need census tracts or building ARP input sessions into regularly scheduled neighborhood council meetings.
  • Transparency in the process can include more people. By being clear about the decision-making process, communities can ensure that people feel informed and empowered to engage in the policy process. Beyond posting on local government websites, providing information in venues that people are most likely to frequent can ensure that the information reaches more community members.
  • Language access is critical to ensuring community input. Some communities have recognized that they must address language barriers to truly pursue community input. Translating materials about the ARP opportunity and having interpretation services available at public hearings and meetings can reduce the barriers to entry for communities that have experienced disproportionate harm from the pandemic.
  • Proposal processes that allow cities or counties to solicit proposals for specific projects can provide new ideas and solutions. Proposal design should ensure that the process allows for small organizations to be included, provides transparency about the criteria used to evaluate successful proposals, and ensures that reporting and compliance are supported with assistance from local governments.

Additional resources & tools
Sources
[1] https://www.cbpp.org/research/poverty-and-inequality/robust-covid-relief-achieved-historic-gains-against-poverty-and
[2] https://www.cbpp.org/research/federal-tax/build-back-betters-child-tax-credit-changes-would-protect-millions-from
[3] https://www.cbpp.org/research/state-budget-and-tax/resource-lists/fiscal-recovery-funds-in-the-american-rescue-plan and https://theseap.org/wp-content/uploads/2022/02/ARP-Toolkit_Spending-Tracker_NC-Report.pdf
[4] Federal Register :: Coronavirus State and Local Fiscal Recovery Funds
[5] https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf
[6] https://medium.com/changelab-solutions/equitable-community-engagement-34d2542f68fd
[7] https://www.witn.com/2022/02/21/pitt-county-commissioners-decide-american-rescue-plan-act-funding-plans/ and https://www.publicradioeast.org/pre-news/2021-11-09/pitt-county-seeks-public-input-on-spending-millions-in-covid-19-relief-funding
[8] https://www.wvgazettemail.com/news/kanawha_valley/charlestons-american-rescue-plan-panel-finalizes-recommendations/article_bfe6ff4c-551a-525e-b091-c44cca2c9af4.html
[9] https://www.nola.com/news/coronavirus/article_9388c410-9e1f-11eb-851b-13b9a30bb486.html and How will $375M in coronavirus aid get spent in New Orleans? This stimulus task force will decide | Coronavirus | nola.com
[10] American Rescue Plan Act (ARPA) | City of Lexington (lexingtonky.gov)
[11] https://www.gainesville.com/story/news/local/2020/07/23/city-sets-racial-equity-plan-goals/42049927/ and https://www.cityofgainesville.org/CityCommission/CommunityInterests/AmericanRescuePlanActFunds.aspx

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CASE STUDY

Employment equity and career pathways to family-sustaining work

COVID-19 and the attendant downturn have had a disproportionately harmful impact on workers of color — simultaneously driving higher unemployment, and for those still working, greater exposure to poor working conditions. Ensuring that workers hardest hit by the pandemic downturn are supported until conditions improve is critical to ensuring a strong recovery for everyone. This goal can be supported at the local level with transformational investments that are now possible through American Rescue Plan Local Fiscal Recovery Funds as well as the intentional pursuit of equitable practices in existing program and service delivery. 

KEY AREAS OF FOCUS
Remove barriers to getting back to work: Many North Carolinians continue to face barriers to getting back to work. Access to child care is by far the biggest barrier facing the most North Carolinians. Affordable transportation is also a significant barrier.(1) Public investments are needed to make quality child care accessible and affordable and to improve transportation networks that would support people getting back to work. 

Boost the pay for essential work: COVID-19 made clear that too many workers who are deemed essential to our collective well-being and the function of our communities have been paid too little to meet a basic standard of living.(2) Local Fiscal Recovery Funds are guided by the U.S. Treasury rule to specifically support premium pay for essential workers at $13/hour.(3) Premium pay policies can extend beyond local governments to focus on employees in the health and human services as well as education and other people-serving and care-giving occupations.

Support equitable workforce development: Jobs still have not returned to pre-COVID-19 levels, and many jobless workers are considering options for retraining to enter new career pathways. Supporting job training for people impacted by COVID-19 or those who live in Qualified Census Tracts could be accomplished with Local Fiscal Recovery Funds directed to apprenticeship programs, short-term credentialing, and other job-training costs. 

Bolster the quality of jobs available: Access to paid sick days is a key marker of job quality, as is access to long-term savings vehicles. Local Fiscal Recovery Funds could establish a retirement savings system or seed the funds to support employers in guaranteeing a minimum number of paid sick days.

CONSIDERATIONS FOR EQUITABLE PROGRAM AND POLICY DESIGN
Treasury guidance makes clear that the priorities should be an inclusive process for allocation decisions along with a focus on disrupting the disproportionate harm COVID-19 has wrought.(4)

The Southern Economic Advancement Project has developed a model resolution and other community engagement tools to support local governments in establishing processes that encourage and utilize public input to guide decision making. These resources can be found at www.theseap.org/arp.
  • Equitable investments would specifically:
  • Include immigrant families
  • Leverage existing institutions and partnerships with grassroots leaders
  • Monitor implementation
  • Consider both the places and people who must be reached

MODELS
Local communities have until December 2024 to allocate Local Fiscal Recovery Funds and until December 2026 to expend the dollars. However, some communities already have begun to invest in strategies that support employment equity and workers’ well-being, and other communities have encouraged community groups to submit proposals for such work. The following are some high-level descriptions of proposed investments to date. 

NORTH CAROLINA
Charlotte would spend a portion of funds on removing barriers to employment and supporting job training for people who lost work during the pandemic.(5)  

Iredell County(6) voted to allocate the first payments of its local American Rescue Plan Local Fiscal Recovery Funds to premium pay for county employees, all of whom were deemed essential personnel and thus required to work in person. The one-time lump payments will be provided to all those workers with earnings below 150% of the Federal Poverty Level, and those not eligible will be provided payments through CARES Act funding. The payments are tiered based on longevity and provide between $2,500 and $1,000 in payments to employees. Additional counties or municipalities that have adopted premium pay plans include Greenville $300,000 (7); Alamance County $3 million (8); and the City of Durham $7.3 million.(9)

Durham has invited a second proposal from community groups that are working to stabilize the child care industry in the city by improving the reimbursement rate that providers receive for providing care to families with low incomes. Research shows that increased reimbursement rates can support more competitive pay for early childhood educators and thus improve the quality of care. In addition to these dollars, early childhood educators and providers will have access to technical assistance and small business support should those providers seek increased star ratings (a measure of quality care used by the state) or more formal licensing.

Durham also has invited a second proposal from community advocates working to support individuals reentering the community after serving time in prison. The program seeks to staff a reentry navigator program that helps people get connected to the housing, income supports, and opportunities for job searches and training that will set them up for success and reduce the likelihood of recidivism.

NATION
Birmingham, Alabama, has responded to the challenges facing the state around vaccine access and the need for health care providers by designing a pathway for community health workers to be engaged to conduct community outreach and work in community health centers to support vaccine drives while also enrolling in training. The training could be in one of three health-related occupational pathways and is fully paid for as part of their workweek. The program is a partnership of the University of Alabama, local workforce training organizations, public health officials, and health care employers.(10)

New York state has established a program to support undocumented workers who lost their jobs during the pandemic in recognition of the importance of their well-being to the broader community’s full recovery. The Excluded Worker Fund was seeded with $2.1 billion in recognition of the exclusion that immigrants had experienced from federal aid programs.(11) Strict eligibility guidelines are in place, and those who meet those guidelines can receive up to $15,600.(12)

Both Montgomery County, Maryland, and Philadelphia, Pennsylvania, are considering building on existing sick-leave and safe-leave policies that were enhanced during COVID-19. In Montgomery County, employees are paid their normal rate and all employees in the county receive a minimum standard of leave.(13) In Philadelphia, the city is requiring employers with 50 or more employees to provide up to 80 hours of paid leave during the pandemic.(14)

On the workforce development side, Indianapolis, Indiana, established EmployIndy, a reemployment rapid response system that connects with people who are receiving Unemployment Insurance to provide job search support and connections to job training and employers.(15) Milwaukee, Wisconsin, plans to utilize ARP dollars to expand apprenticeships and job training, including the creation of two specific credentialing programs in lead abatement and clean energy.(16) Syracuse, New York, will contract with a nonprofit workforce development organization to coordinate across training providers to serve people who have lost jobs and need to retrain for new careers. Training will be in a range of high-demand industries with the potential to pay a living wage.(17)

Advocates in Cincinnati, Ohio, have recommended establishing local workforce safety and labor law enforcement divisions with American Rescue Plan dollars as well as a fund for worker education and representation.(18) With an initial investment of $2 million in local American Rescue Plan funding, the city would build out the existing infrastructure of support to workers (currently led by volunteers) and seed a fund that could be replenished over time with attorneys’ fees.

OTHER FUNDING STREAMS TO SUPPORT EMPLOYMENT EQUITY
While Local Fiscal Recovery Funds provide an important flexible source of funding for employment equity and workforce investment, there are additional funding streams available through the American Rescue Plan.
  • Good Jobs Challenge(19) provides a competitive grant process for supporting the development of good jobs and the systems that would connect workers to these opportunities.
  • Public Health Workforce(20) provides funding to compensate, train, and expand the public health workforce in communities.
  • Infrastructure Funds to build out various public systems can provide an increased supply of good, quality jobs in the community if paired with strong commitments to local hiring.

ADDITIONAL RESOURCES AND MODELS
The American Rescue Plan Clears a Path to Recovery for State and Local Governments and the Communities They Serve — Economic Policy Institute and EARN (Economic Analysis and Research Network)

Building a Just and Inclusive Recovery for All Workers — EARN and National Employment Law Project

The American Rescue Plan: Recommendations for Addressing Early Educator Compensation and Supports — Center for the Study of Child Care Employment

Responsible Contracting: Best Practices — National Employment Law Project

Policy & Tools: Responsible Contracting — Partnership for Working Families

Tracking Subsidies, Promoting Accountability in Economic Development — Good Jobs First

SOURCES
  1. ​Barriers to employment include transportation, child care, and the cost of job training. You can read more about these barriers at: https://www.ncjustice.org/publications/state-of-working-nc-2021-protecting-connecting-workers/
  2. https://www.ncjustice.org/publications/state-of-working-nc-2020-curing-what-ails-us/
  3. https://www.ncjustice.org/publications/state-and-local-fiscal-recovery-funds-present-opportunities-to-address-needs-in-communities/
  4. http://aheadnc.org/uploads/1/1/8/3/118308969/nc_ahead_arp_matrix_for_equity_v2.pdf
  5. https://charlottenc.gov/finance/Documents/2021_SLFRF_Recovery_Plan-FINAL.pdf
  6. https://www.iredellfreenews.com/news-features/2021/iredell-commissioners-making-plans-to-utilize-35-million-in-american-rescue-plan-act-funds-employees-to-receive-premium-pay-for-essential-work-during-pandemic/
  7. https://www.greenvillenc.gov/government/american-rescue-plan-appropriation-plan
  8. https://www.alamance-nc.com/arp/wp-content/uploads/sites/79/2021/08/ARP-BOC-Presentation-8-2-2021-Updated-after-Agenda-Released.pdf
  9. https://durhamnc.gov/4529/American-Rescue-Plan
  10. https://www.brookings.edu/blog/the-avenue/2021/03/23/how-should-local-leaders-use-their-american-rescue-plan-funding/
  11. https://www.epi.org/blog/new-york-included-undocumented-immigrants-in-pandemic-aid-and-290000-workers-will-benefit-other-states-should-replicate-the-program/
  12. https://fiscalpolicy.org/excluded-worker-fund-will-benefit-290000-undocumented-new-yorkers-and-boost-local-economies
  13. https://www.peoples-law.org/montgomery-county-earned-sick-and-safe-leave
  14. https://www.phila.gov/documents/covid-19-pandemic-paid-sick-leave-resources/
  15. https://employindy.org/
  16. https://wrtp.org/american-rescue-plan-money-to-go-toward-workforce-development/?utm_source=rss&utm_medium=rss&utm_campaign=american-rescue-plan-money-to-go-toward-workforce-development
  17. https://www.localsyr.com/news/local-news/syracuse-wants-to-use-arpa-funding-to-help-residents-find-work/
  18. https://www.policymattersohio.org/research-policy/fair-economy/democracy-government/economic-stimulus/four-ways-the-american-rescue-plan-can-support-working-people
  19. https://eda.gov/arpa/good-jobs-challenge/faq/#1a
  20. https://www.cdc.gov/cpr/readiness/funding-ph.htm

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arP advocacy

Q&A AND RESOURCES FOR LOCAL ADVOCATES

Why does the ARP represent such a great opportunity?
  • $3.2 billion in fiscal recovery funds will be distributed to local governments across the state according to federal formula.
  • County and municipal budgets have remained healthier than initially anticipated, freeing up significant resources that may be applied to community priorities.
  • Spending decisions are made by local jurisdictions themselves.
 
Where can I look to find out how much ARP funding has been allocated to local governments?  
How may ARP funds be used?
Final Treasury guidance was released in early January with an effective date of April 1, 2022, in four categories:
  • Replace lost public sector revenue.
  • Support the COVID-19 public health and economic response.
  • Provide premium pay for eligible workers performing essential work.
  • Invest in water, sewer, and broadband infrastructure.
 
Several approved uses directly address barriers to economic mobility — see enumerated uses for responding to negative economic impacts. Examples include:
  • Direct cash payments; food assistance; emergency housing assistance.
  • Assistance to individuals who want and are available for work (e.g., job training).
  • Programs/devices/equipment for internet access, including subsidies for cost of access.
  • Child care services; programs to address learning loss in impacted communities.
  • Loans/grants to impacted small businesses and nonprofit organizations.
  • Development of affordable housing and supportive housing.
 
Overview of Treasury Final Rule — See especially pages 14, 15, 17, 18, and 20 as well as the section covering essential workers on page 35:
https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf
 
Treasury FAQ: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf
 
Where can I find NC-specific analysis/guidance on the use of funds and compliance?
UNC School of Government has excellent resources, see especially Kara Millonzi’s work:
American Rescue Plan Act (ARPA) Funding | Coates’ Canons NC Local Government Law (unc.edu)
 
What is the timeline associated with ARP funds?
  • Drawn down in two installments (tranches).
  • Local governments were eligible to request the first tranche May 2021.
  • Second tranche to be distributed June/July 2022.
  • Funds must be obligated by Dec. 31, 2024, expended by Dec. 31, 2026,.
 
How are local governments deciding to use their allocations?  
Where can I find models and examples from other communities?
National Association of Counties — county examples searchable by topic, size, and state:
County Investments of American Rescue Plan Recovery Funds (naco.org)
 
North Carolina Justice Center — background and examples:
aheadnc_toolkit_arp_funds_proof2.pdf
 
Southern Economic Advancement Project — spending tracker, model resolution, community engagement guide: ARP Toolkit - SEAP (theseap.org)
 
Policy Link — 10 Priorities for Advancing Racial Equity through the ARP:
RecoveryGuide-LJ-2021_050621c.pdf (policylink.org)
 
Example of local advocacy — letter to elected officials connecting community-identified needs with recommendations for ARP spending:
P4P-Letter-ARP-Funds-Cumberland-Co-Fayetteville-4-7-21.pdf (lafayettesociety.org)

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Matrix of equity choices in local arp fiscal recovery fund allocations

​Local Fiscal Recovery Fund allocations to county and municipal governments in North Carolina can power equitable outcomes for community members, ensuring that everyone has what they need to get through this pandemic and its public health and economic harm. To address the greater harm experienced by Black, Indigenous, and other persons of color due to COVID-19, local policymakers must design investments and solutions that center these communities’ experiences. During COVID-19, systemic failings made these communities more vulnerable to the loss of life, income, and well-being. By centering equity, local leaders will restore communities so they can reach their greatest potential, which will benefit all North Carolinians.

us treasury guidance

driving dollars to secure equitable outcomes in recovery
Address the economic effects of the pandemic
• Establish an excluded worker fund to ensure that all workers who have lost jobs receive wage replacement
• Provide cash assistance to households who have lost income or to people who live in qualified census tracts based on persistently high poverty rates
• Provide a monthly transportation stipend to cover the costs to travel to work and school and to participate in the community
• Provide a voucher for child care costs for people who are income eligible
Pay essential workers
​
Address the economic effects of the pandemic


​

​​Address the economic effects of the pandemic







​
Support public health expenditures












Address the economic effects of the pandemic








Invest in water, sewer, and broadband infrastructure







Replace lost local government revenue

Engage community input
​
• Subsidize the wages of workers in essential industries through a grant program designed after a local Earned Income Tax Credit
• Establish a living wage certification program, and engage industries with wages below $13 per hour, the premium pay rate identified by U.S. Treasury
• ​Provide a Back to Work payment to cover employment expenses
• Fund a campaign to certify eligible businesses as Historically Underutilized Businesses
• Establish a small business incubator or accelerator that engages Historically Underutilized Businesses to support their growth and connection to public contracts
• Provide grants to Historically Underutilized Businesses with revenue losses
• Commit to providing a certain share of public contracts to Historically Underutilized Businesses

​• Supplement existing funding for additional school nurses, counselors, and social workers to expand COVID-19 surveillance and vaccination efforts, as well as to support the public health, mental health, and other areas necessary for learning
• Fund incentives for community members to receive COVID-19 vaccinations and booster doses
• Expand services for mental health and substance use disorder through public agencies and nonprofit organizations
• Bolster funding for personal protective equipment in high-risk settings, including congregate living facilities (group homes, jails, shelters, retirement communities, and more) and educational settings (child care, K-12 schools, colleges, and universities)
• ​Strengthen food assistance programming for seniors

​• Acquire housing in Qualified Census Tracts and create infill affordable housing in more communities to meet the need
• Establish or add to an affordable housing trust fund to develop new units at 30 percent Area Median Income or below
• ​Provide direct funding for legal assistance for residents who face eviction
• ​Fund housing navigators to support local residents in seeking rental assistance, alternate housing, eviction prevention, diversion services, legal services, and more
• Provide local funding for emergency utility assistance

• Build water and sewer infrastructure in communities that have not been reached by city or county services
• Pay the missed payments on water and sewer for customers with low incomes
• Subsidize the cost of broadband access
• Prioritize disaster mitigation and resiliency for communities historically impacted by major disasters, including hurricanes, through investments in water and sewer infrastructure

• ​Fund grassroots infrastructure and community connections to ensure all households have information from trusted sources about available programs and services
• ​Create various channels to gather input from community on the allocation of American Rescue Plan funds

download A printer-friendly PDF here
Equity Matrix for Local Governments
File Size: 99 kb
File Type: pdf
Download File

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Fact Sheet: Impact of the American Rescue Plan on North Carolina 

The American Rescue Plan Act (ARPA), signed into law in March 2021, enacted transformational change and is widely seen as the most sweeping anti-poverty legislation in a generation, estimated to reduce child poverty by more than half and narrow the gap in poverty rates by race and ethnicity.

The Act comprises dozens of provisions, some of which would be directly accessible to families, including expanded tax credits for working families and families with children, rental assistance, increased food assistance benefits, and other critical supports to help families stay afloat while the COVID-19 pandemic rages on. It also includes substantial investments in systems supports, including supports for community health centers and schools as well as flexible funds for state and local governments to make investments based on the needs they identify in their communities as a result of the COVID-19 pandemic.
​
The table below includes many, but not all, of the funding streams included in the American Rescue Plan, including its general purpose by issue area, name of the funding stream, allocation or estimated allocation for North Carolina or other eligible recipient(s), and information about where to find additional information
Go to Fact Sheet: Impact of the American Rescue Plan on North Carolina

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State and Local Fiscal Recovery Funds Present Opportunities
​to Address Needs in Communities​

On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), which includes
$350 billion for state and local governments to pay for much-needed investments to respond to the COVID-19 pandemic and to begin to build back stronger communities. On May 10, 2021, the U.S. Treasury released guidance on how states and localities can use the funds. This document provides a brief overview of the guidance and opportunities that community-based, direct service, statewide, and other organizations can leverage.
Go to State and Local Fiscal Recovery Funds Present Opportunities to Address Needs in Communities

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