How should local leaders use their American Rescue Plan funding?
Among the $1.9 trillion worth of federal COVID-19 relief in the newly signed American Rescue Plan Act is $350 billion for “Coronavirus State and Local Fiscal Recovery Funds.” At roughly one-fifth of the bill’s total cost, these funds will be deployed to state and local governments in two tranches (the first within 60 days and the second a year after that initial allotment) to mitigate the fiscal impact of the COVID-19 pandemic.
For many cities and counties, the American Rescue Plan’s (ARP) state and local funds are not just a $350 billion lifeline; they represent the largest positive fiscal jolt to their budgets in decades. Now, a scramble is underway to determine how best to deploy the money. The decisions made in the coming weeks— and over the next year regarding the second tranche of funding—will determine whether cities merely enjoy a brief stimulus or seed a new trajectory of inclusive economic growth.
The stakes are high. The money needs to move fast and be deployed smartly and equitably. In 10 years, we may look back at this time and ask: Which places merely spent their money, and which places invested it?
Based on our on-the-ground work in Northeast Ohio and Birmingham, Ala., we believe that elected officials—and the networks of civic, business, philanthropic, and community stakeholders that surround them—should take a three-pronged approach to using their ARP funding: stabilize, strategize, and organize.