Flexibility for American Rescue Plan Act funds advances but likely depends on infrastructure deal

On October 28, President Joe Biden announced he will present a scaleddown version of his Build Back Better Act following negotiations between key factions in the House and Senate. While it isn’t immediately clear that it will satisfy differing demands from within the Democratic party, its successful passage would likely allow an up or down vote in the House on the bipartisan Investment in Infrastructure and Jobs Act (IIJA). Efforts at reasonable compromise have been supported by numerous organizations, including the National League of Cities (NLC) and the National Association of Counties (NACo).

Likely tied into the success of Build Back better and IIJA discussions is another important bill related local assistance. The Senate recently passed (without objection) legislation that would allow local governments to use local Coronavirus Aid, Relief, and Economic Security (CARES) Act and American Rescue Plan Act (ARPA) dollars to use the funds, with certain limitations, for eligible uses that include infrastructure, disaster relief, housing, community development, and other investments that will have a long-term economic return.

A key feature of the bill is permission for eligible government entities to spend the greater of $10 million or 30% of their total fiscal relief funding on infrastructure and other new categories, some of which would be created by the IIIJA, upon its passage. In addition, several types of local infrastructure funding categories would be eligible for funding by local ARPA and CARES dollars.

Again, S. 3011 still needs to pass the House along with the adoption of IIJA and, likely, the hotly contested budget reconciliation package. Meanwhile, the League – along with Colorado Counties, Inc, and the Special District Association – continue to advocate to state legislators and Gov. Jared Polis to do more to allow local governments to leverage their local dollars against state funding, especially related to infrastructure. S. 3011 presents a significant red carpet for state leaders walk down toward stronger state-local collaboration.

For more information, contact Meghan Dollar (mdollar@cml.org) or Kevin Bommer (kbommer@cml.org).