This week, the U.S. Department of the Treasury released guidance for the American Rescue Plan’s Coronavirus State and Local Fiscal Recovery Funds. The document, known as the “Final Interim Rule,” sheds light on the parameters for using the state and local American Rescue Plan funds. It will help Minnesota state leaders as they determine how to spend the federal funds in the context of the state’s coronavirus needs and overall budget for the next biennium.
The guidance also applies to the funds for local governments. There are four basic categories of uses spelled out in the American Rescue Plan:
- To respond to the public health emergency or its negative economic impacts including assistance to households, businesses, non-profits, and impacted industries
- To respond to workers performing essential work during COVID-19 by providing premium pay
- For provision of government services to the extent of the reduction in revenue due to the COVID-19 health emergency
- Make necessary investments in water, sewer, or broadband infrastructure.
The total guidance is 151 pages and provides information on appropriate uses for the funds, how to calculate lost revenue, and what constitutes eligible infrastructure. In many ways, the guidance gives broad latitude to states and local governments, especially in the instance of lost revenue. Throughout the document, the Treasury encourages states and local units of government to address the needs of low-wage workers and communities and groups that have been hardest hit by the pandemic, such as people of color.
To learn more about the American Rescue Plan funds for local governments, attend this May 18 webinar hosted by the League of Minnesota Cities in conjunction with the CGMC and other local government organizations.
