About the American Rescue Plan Act

The American Rescue Plan Act of 2021 (ARPA) passed Congress and was signed into law by President Biden in March 2021 in response to the COVID-19 pandemic and its impact on state and local economies, workers, and families. It funds several different programs and initiatives, but the main focus here is on its State and Local Fiscal Recovery Fund, which provides grant money directly to states and individual local governments, including cities.

What Are the Limitations on Cities’ Use of ARPA Funds?

The State and Local Fiscal Recovery Fund (SLFRF), created by ARPA and administered by the U.S. Department of the Treasury, dedicates money to cities under the premise of assisting cities and their residents with recovering from the health and economic impacts of the COVID-19 pandemic. As such, SLFRF funds are meant to be used primarily to replace lost city revenue and to remediate the harmful impacts of the pandemic. Funds expenditures should generally fall under these seven categories:

1. Public Health
2. Negative Economic Impacts
3. Services to Disproportionately Impacted Communities
4. Premium Pay
5. Infrastructure
6. Revenue Replacement
7. Administrative

Cities have broad discretion to interpret these guidelines and use funds as needed, but must have a justification for the funds that meet ARPA guidelines.

Additionally, in developing funding plans for ARPA funds, cities should keep in mind the key objectives underlying SLFRF funds:

• Support the urgent COVID-19 response efforts to continue to decrease spread of the virus and bring the pandemic under control.
• Replace lost revenue for eligible recipients to strengthen support for vital public services and help retain jobs.
• Support an equitable recovery through immediate economic stabilization for households and businesses
• Address systemic public health and economic challenges that have contributed to the unequal impact of the pandemic on certain populations.

Additional ARPA Resources

These resources contain further information and ideas about how cities can use ARPA funds to address particular concerns.

General Resources

Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule (US Treasury)

Coronavirus State & Local Fiscal Recovery Funds: January 2022 Presentation (US Treasury)

• Using Evidence with State and Local Fiscal Recovery Funds (US Treasury)
• COVID-19 Federal Assistance e311 (Bloomberg Cities Network)
  • Provides a forum where cities may ask a team of experts questions about federal COVID-19 funding and how it can be used to support recovery. May browse answers to questions already asked or submit a new question.
• American Rescue Plan Resources Center (U.S. Conference of Mayors)
• JobsOhio American Rescue Plan Guidebook (JobsOhio)

Public Health & Safety

• Five Funding Opportunities in the American Rescue Plan For Violence Prevention, Trauma Recovery, Reentry, Mental Health and Community Development (Alliance for Safety and Justice)
• American Rescue Plan Act of 2021: Guide to Advancing Justice-Related Goals (Council of State Governments)

Housing Stability and Community Development

• Using ARPA Coronavirus State and Local Fiscal Recovery Funds to Develop Affordable Housing (National Low Income Housing Coalition)
• Affordable Housing Investments with ARPA State and Local Fiscal Recovery Funds (National Low Income Housing Coalition)

Business Recovery and Worker Support

• Four Ways the American Rescue Plan Can Support Working People (Policy Matters Ohio)
• The American Rescue Plan Can Be a Lifeline for Business Districts (Brookings)
• Leveraging ARPA Fiscal Recovery Funds to Support Small Businesses (National League of Cities)
• Using Local Fiscal Recovery Funds to Support Vulnerable Children and Families (National League of Cities)