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American Rescue Plan for Local Government

On March 12, 2021, President Biden signed the American Rescue Plan Act (“Act”) into law. This Act, among other things, gave $350 billion to state and local governments to help support budgets after the effects of the COVID-19 pandemic (“Pandemic”). States will receive 60% of the funds while local governments will receive the remaining 40%.

According to the National League of Cities, Pennsylvania municipalities, in total, can expect to receive a significant amount of funds, approximately $3,306,492,631.49. Additionally, the National League of Cities resource shows the allocation per municipality. As the payments are rolled out, Pennsylvania local governments will be able to use these funds to support their budgets. The funds are meant to replace the revenue lost during the Pandemic along with financial assistance to support recovery.

There are some restrictions to these funds, however. The funds received by local governments may only be used to cover costs for certain purposes through December 31, 2024, so there is no need to rush spending the funds. According to the statute, the purposes for the funds include supporting public health emergency recovery for households and businesses, paying essential workers premium pay, replacing revenue lost by the Pandemic, and investing in broadband, water, or sewer infrastructure. There is no guidance yet from the U. S. Department of Treasury that outlines the complete list of permitted uses. Stock and Leader’s Municipal Group will provide additional guidance on this issue when the U. S. Department of Treasury issues an update.

As always, the Municipal Group at Stock and Leader can help local governments navigate this Act along with any other legal need. Contact a member of Stock and Leader’s Municipal Law team today.

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