{"id":7875,"date":"2021-03-15T09:48:20","date_gmt":"2021-03-15T13:48:20","guid":{"rendered":"http:\/\/blogs.mml.org\/wp\/inside208\/?p=7875"},"modified":"2021-03-15T09:48:20","modified_gmt":"2021-03-15T13:48:20","slug":"direct-flexible-federal-aid-for-all-local-governments-signed-by-president","status":"publish","type":"post","link":"https:\/\/mml.org\/inside208\/2021\/03\/15\/direct-flexible-federal-aid-for-all-local-governments-signed-by-president\/","title":{"rendered":"Direct, Flexible Federal Aid For All Local Governments Signed By President"},"content":{"rendered":"

(Update:<\/strong> To help answer some of the many questions we’re getting from our members, NLC shared two additional documents – Estimated State and Local Allocation Spreadsheet Reference Guide<\/a> and Notes on File Labeled “State and Local Allocation Output 02.25.21<\/a>) In addition, NLC has established a Q&A portal<\/a> for your ARP-related questions. They would also appreciate you sharing your ongoing challenges, successes and questions through this portal.<\/a>)<\/p>\n

Following the US House’s action early last week, concurring in the Senate’s changes from the previous weekend to H.R. 1319<\/a>, the American Rescue Plan Act federal stimulus was signed at the end of the week by President Biden.<\/p>\n

Following months of advocacy by the Michigan Municipal League and our partners at the National League of Cities<\/a>, we were successful in securing a $350 billion provision for aid to state and local governments<\/a>.\u00a0 This appropriation includes $130.2 billion of direct and flexible aid for all 19,000 local units of government across the country, regardless of population.\u00a0 This aid is split evenly between counties and municipalities, at $65 billion each.<\/p>\n

Acknowledging the strict spending limitations and lack of support for most local governments from last year’s CARES Act, Congress and the President inserted this key provision in the American Rescue Plan Act following intense lobbying from NLC and countless meetings, calls, and emails from MML staff, leadership, and member communities to Michigan’s congressional delegation over the past year.<\/p>\n

The aid to local governments in the bill is divided into two distribution formulas.\u00a0 Due to the fact that the federal government has very limited experience providing direct aid to local units and the wide variance in local government structures among the each of the states, the aid to local governments will be split with $45.5 billion being sent directly from Treasury to municipalities generally viewed at “entitlement” communities under HUD’s Community Development Block Grant program formula that uses population, poverty, and housing instability to determine estimated allocations.\u00a0 The remaining $19.5 billion will be sent to each of the states to distribute to their remaining local governments on a per capita basis. Dollars granted under this $19.5 billion allocation are capped at 75% of the municipality’s most recent budget as of January 27, 2020.\u00a0 The federal language requires each state to send these dollars to their municipalities within 30 days of receipt, unless granted an extension.\u00a0 Even under an extension, all of these dollars must be distributed within 120 days of receipt of the state will face a financial penalty.\u00a0 States are prohibited from changing these allocations or imposing additional requirements.\u00a0<\/span><\/p>\n

All of these dollars will be sent by the federal government in two, equal distributions.\u00a0 The first is required to be disbursed within 60 days of the bill’s enactment and the second, one year after the first distribution.\u00a0 Municipalities may use these funds through December 31, 2024.<\/p>\n

The Department of Treasury will need to issue guidance detailing its interpretation and implementation of eligible uses, but the statutory language specifically authorizes the following uses of these funds:<\/p>\n