Federal COVID aid accepted to pay for roads and natural disasters
Jefferson City, Missouri — State and local governments will soon have new flexibility to spend billions of federal coronavirus relief dollars on things not directly related to the pandemic, including building new roads and bridges and helping people affected by wildfires, floods and other natural disasters.
Expanded spending authority for pandemic relief previously approved was one of many provisions included in the federal government’s recently passed $1.7 trillion spending bill for the 2023 budget year. It comes after city, county and state officials lobbied for more than a year for more flexibility in how to use a $350 billion aid pool approved by President Joe Biden and the Democratic-led Congress in March 2021.
The US rescue law included federal aid to all levels of government — from states and territories to small cities and towns — to help cover the costs of the COVID-19 response, support public finances, and help invest for the long term. community strengthening projects.
Although the program has considerable flexibility as originally implemented by the US Treasury Department, some uses of the money remain limited. The new expanded spending options are expected to come into effect by the end of February after the Treasury releases its updated forecast.
“I think it will leverage ARPA dollars to be as productive as possible,” said Brittney Kohler, legislative director of transportation and infrastructure for the National League of Cities. He added, “We see this as a very valuable tool to get the most out of every federal dollar.”
Under the revised spending rules, states and local governments can use their federal pandemic funds to provide local matching funds needed to raise additional federal grants for highway and transportation projects, including those funded by the Infrastructure Investment and Jobs Act, which Biden signed in November. 2021.
Governments are allowed to allocate up to US$10 million or 30%, whichever is greater, for this transportation infrastructure.
There is no limit on how much of their allowance can be spent on disaster relief, such as temporary shelter, food and financial assistance.
Governments can receive disaster relief through the Federal Emergency Management Agency.
“The process at FEMA can be time-consuming and a bit overwhelming,” said Susan Frederick, senior counsel for federal affairs at the National Conference of State Legislatures. “It would be funding that would be available to states more quickly than going through all the hoops.”
A quarter of counties in the United States currently have federal disaster declarations, said Mark Ritacco, chief of government affairs for the National Association of Counties.
“The natural disaster could have been made worse by the county’s focus on the COVID-19 pandemic,” Ritacco said, had it diverted local funds that might otherwise have been spent on disaster relief.
The greater flexibility will primarily benefit large governments that have received more than $10 million in US bailouts. Indeed, a Treasury Department rule issued a year ago allowed all governments to assume up to $10 million in revenue losses due to the pandemic, equal to the amount spent on general government services. may include road or accident removal.
States, territories and the District of Columbia budgeted 71% of federal funds for the pandemic as of Sept. 30, according to an Associated Press analysis of data made available through the Treasury Department.
1,850 local governments that received at least $10 million complied with Treasury reporting requirements; as of September 30, they budgeted 53% of the funds allocated for the relief of the pandemic.
Governments have until the end of 2024 to allocate federal funds against the pandemic to projects and spend them by the end of 2026.
As a result of the new law, officials are unlikely to radically change their already planned spending. “The added flexibility creates an opportunity for cities to move money around their budgets,” said Michael Wallace, legislative director of housing, community and economic development for the National League of Cities.
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