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American Rescue Plan

Congress passed and President Biden has signed the American Rescue Plan, which includes $1.9 trillion dollars in funding to individuals, schools, businesses, and areas suffering from the COVID-19 pandemic. Among that total, Connecticut towns and cities are anticipated to receive $2.55 billion statewide ($1.56 billion to general government / $995 million to schools).

CCM continues to obtain and share with members when available updated information regarding estimated allocations and uses under the American Rescue Plan– including estimated educational appropriations.

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Specific Information and Allocations back to top

There still remains some questions as to how the Treasury Department will allow some of the funds to be used. CCM will be working with NLC to have Treasury answer some of the questions posed that require additional guidance. We will have a webinar with our federal partners to provide more information and clarity in regards to the final bill and any clarifications that have been provided by Treasury. More information regarding the webinar will be sent once it is scheduled.

Some of the Key Provisions of ARP back to top

  • Funding for towns and cities will be distributed in a modified CDBG formula with entitlement cities (those with a population over 50,000) receiving funding directly from the Treasury Department and non-entitlement towns (those with a population under 50,000) distributed by the State as a passthrough.
  • There is a particular provision that will allow states—like Connecticut—to receive additional funds which would have been allocated if the State had county governments. Therefore, Connecticut would not miss on additional funding.
  • Funds must be spent by the end of calendar year 2024.
  • State and local governments must provide periodic reports to the Treasury Department with a detailed accounting of the use of funds. States and territories must also provide any modifications to tax revenue sources. Funds can be recouped by the Treasury Department if the recipient does not comply with the eligible uses.
  • Local governments will receive allocations in two tranches—the first half 60 days after enactment and the other half one year later. For non-entitlement units of local government, those deadlines are the dates for Treasury to send the funding to the state, which has an additional 30 days to distribute to each non-entitlement unit of local government. 
  • States have NO discretionary authority to change the amount of, or attach additional requirements to, the payments allocated to local governments.
  • For non-entitlement towns, funding may not exceed 75% of the most recent adopted local budget as of January 27, 2020. Those funds will be returned to the Treasury Department.

American Rescue Plan FAQ back to top

When will my municipality receive funds?

Those municipalities designated as “Metropolitan cities” or “entitlement cities” will receive their money directly from Treasury within 60 days of the laws signing (March 11, 2021). Municipalities designated as “non-metro units of local government” or “non-entitlement cities” will receive their money approximately 90 days after the signing of the law (March 11, 2021). The latter is due to the fact that Treasury will distribute those funds to the State to serve as a pass-through. The States will have 30 days to distribute the funds when they receive them. CCM is working with the State toe ensure they are passed on in a timely manner. In addition, Connecticut municipalities will receive on a per capita basis a portion of the county funding from the State which will serve as a pass-through. It is likely that Treasury will determine the specific per capita amount per municipality. Funding will be released to state and local governments by Treasury in two tranches. Half the funding each city is entitled to will be released under the first tranche by May 10, 2021; and the second half of funds will be released under the second tranche one year after the disbursement of the first tranche.

When can we expect more guidance?

The ARP gives the U.S. Department of Treasury 60 days from enactment (March 11, 2021) to make their allocations to state and local governments. Considering the complexity of distributing these funds to 19,000 municipalities (along with funds to States, businesses and individuals) the Treasury may take close to 60 days to distribute and therefore develop guidance.

When will I need to report to the Treasury?

Municipalities will need to make “periodic” reports to the U.S. Department of Treasury, according to the statute. However, there are not details regarding the process. The guidance from the U.S. Department of Treasury will likely include the reporting provisions and in what format they will need to be reported. It is likely that audits might go on for years after 2024, the date by which the money will remain available. Therefore, it is important to maintain good records.

Do the funds have to be used or obligated by December 2024?

More information will need to be provided by the Department of Treasury on this. The bill states that funds for local governments will “remain available through December 31, 2024.” Treasury will need to decide whether this means spent by or obligated by that date.

Can recovery funds be used for stormwater projects and expenses?

At this point, it is unclear if stormwater or wastewater projects and expenses are eligible expenses under the statute. CCM and NLC have encouraged a liberal interpretation of the statute to include stormwater and wastewater projects and expenses.