The American Rescue Plan Act of 2021 (ARPA) is the sixth federal COVID-19 relief bill passed last year, and is by far the largest infusion of resources to the State of Connecticut. Specifically, the State expects approximately $6 billion of ARPA funds to enter through various grants to the State and Local governments.
Coronavirus State and Local Fiscal Recovery Funds The Coronavirus State and Local Fiscal Recovery Funds Will Deliver $350 Billion for State, Local, Territorial, and Tribal Governments to Respond to the COVID-19 Emergency and Bring Back Jobs.
The Coronavirus State and Local Fiscal Recovery Funds provide eligible state, local, territorial, and Tribal governments with a substantial infusion of resources to meet pandemic response needs and rebuild a stronger, and more equitable economy as the country recovers.
Recipients may use these funds to:
In addition, the final rule presumes that an expanded set of households and communities are “impacted” or “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis. Further, the final rule provides a broader set of enumerated eligible uses available for these communities as part of COVID-19 public health and economic response, including making affordable housing, childcare, and early learning services eligible in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities.
Further, the final rule allows for a broader set of uses to restore and support government employment, including hiring above a recipient’s pre-pandemic baseline, providing funds to employees that experienced pay cuts or furloughs, avoiding layoffs, and providing retention incentives.
The final rule offers more streamlined options to provide premium pay, by broadening the share of essential workers who can receive premium pay without a written justification while maintaining a focus on lower-income and frontline essential workers.
The final rule significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability, and adds additional eligible water and sewer infrastructure investments, including a broad range of lead remediation and stormwater management projects.
Within these overall categories, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities.
Recipients may NOT use these funds to:
Treasury’s Interim Final Rule implements this requirement. If a state, locality, or territory cuts taxes, they must demonstrate how they paid for the tax cuts from sources other than Coronavirus State Fiscal Recovery Funds—by enacting policies to raise other sources of revenue, by cutting spending, or through higher revenue due to economic growth. If the funds provided have been used to offset tax cuts, the amount used for this purpose must be paid back to the Treasury.
Treasury Department Guidance
Governor Lamont developed five key areas for these investments:
(1) Defeating COVID-19
(2) Investing in our Future
(3) Creating a More Affordable Connecticut
(4) Economic Growth that Works for All
(5) Modernizing State Government
FEMA Guidance and Resources
Economic Development Administration (EDA) Programs
Under the American Rescue Plan, EDA was allocated $3 billion in supplemental funding to assist communities nationwide in their efforts to build back better by accelerating the economic recovery from the coronavirus pandemic and building local economies that will be resilient to future economic shocks.