The American Rescue Plan Act (ARPA) was a $1.9 trillion piece of legislation enacted in March 2021 to help the country recover from the COVID-19 pandemic and prepare for the future. Key to the bill was $350 billion in direct aid to state and local governments through the State & Local Fiscal Recovery Fund. As initially passed, the funding was designed to help state and local governments respond to public health and economic emergency, protect infrastructure, and support government services. The U.S. Treasury confirmed that information technology use cases are eligible for ARPA funding in the Interim Final Rule and the Final Rule.
Tranches 1 + 2
ARPA funding is released in two equal waves, or “tranches.” The first tranche began in May 2021, and the second tranche will be released one year after. Most governments received the first round of funding and are preparing for the second round.
Important Updates
Since the original legislation in March 2021, there have been several important updates to ARPA funding. Unfortunately, there has also been a wave of misinformation and confusion among state and local governments, private sector partners, and even the feds themselves! The good news is that all the significant updates to ARPA are beneficial for government recipients – providing more time and flexibility to use the funding to make the most sense locally.
- The U.S. Treasury has clarified and updated the reporting requirements for state and local government recipients. The new provisions provide recipients with more time to report.
- A 2022 federal funding bill caused concern with a proposal to rescind small portions of ARPA for a handful of states. However, this proposal was not enacted.
- The same 2022 federal funding bill also provided greater flexibility for ARPA funding. The legislation allows state and local governments to use their funding for additional infrastructure categories permitted in the Infrastructure Investment and Jobs Act (IIJA) (“the Infrastructure Bill”).
- A new federal agency, Pandemic Oversight (PRAC), was created in 2020 to oversee CARES Act funding. After pandemic response programs grew in funding and complexity, so did Pandemic Oversight. The agency’s website now provides a wealth of data on ARPA disbursements and spending.
- There was initial confusion on the expiration date for these ARPA funds. The U.S. Treasury clarified that the funds must be obligated by December 31, 2024, but the deadline for spending is December 31, 2026.
How ARPA Funds Are Used
State and local governments have started using their ARPA funding to respond to their needs and prepare for the future.
Here are examples of real projects governments are using ARPA money to fund:
- Natick, Massachusetts, funded technology improvements for government services and can be accessed remotely – including building permits and vital records.
- Cheyenne, Wyoming, will implement an Enterprise Resource Planning (ERP) software system.
- Vermont and Mississippi are updating and expanding broadband access for citizens.
- New Jersey is modernizing its unemployment insurance system.
- Rhode Island is implementing a permitting and licensing system at the Department of Environmental Management.
- Cuyahoga County, Ohio, will spend over $4 million on IT infrastructure upgrades and cybersecurity.
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