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Unlocking Possibilities: How Cities Are Using ARPA’s State and Local Fiscal Recovery Funds After Two Years

Unlocking Possibilities: How Cities Are Using ARPA’s State and Local Fiscal Recovery Funds After Two Years

Source: National League of Cities

The American Rescue Plan Act (ARPA) delivered $65.1 billion of direct federal aid to all cities, towns and villages across the country through the Coronavirus State and Local Fiscal Recovery Fund (SLFRF). This funding has helped local governments invest in critical municipal revenue needs, respond to the COVID-19 pandemic and support residents and communities in need as they continue to recover from the pandemic. 

ARPA and the SLFRF program were designed to stabilize communities in response to the impacts of the pandemic. The flexibility afforded by these programs resulted in a wide range of approaches to address residents’ needs ranging from enhancing public health and safety to revitalizing the municipal workforce to enhancing revenue streams. Local governments used similar strategies to determine where to invest their funds, including assessing community needs, providing opportunities for direct community engagement, crafting comprehensive recovery plans and reviewing the resources available through the US Department of the Treasury (Treasury). 

This report finds that SLFRF helped stabilize local governments and their communities and positively support residents through direct engagement. Additionally, SLFRF did not lead to excessive municipal spending or cause global or national inflation. 

This report reviews how ARPA and the SLFRF program: 

  • Stabilized municipal budgets to maintain resident service delivery by analyzing local government revenue and expenditure data over a five-year period 
  • Promoted local investments into communities and residents by examining projects municipalities supported with these funds  
  • Guided small localities as they learned how to manage federal grants and how the Treasury engaged grantees throughout the process 
  • Relied on data to ensure the communities that were in the most need received equitable funding to address their needs

View the report.