As with many aspects of the COVID-19 pandemic, the American Rescue Plan Act of 2021, the legislation providing recovery funds to local governments, is complicated.
Since every North Carolina county — and many cities and towns — has received or will receive ARPA funds, Carolina Public Press is taking a look at how and where many of them are allocating and spending the money. This article is the first in a yearlong project that will put ARPA funds in 18 Western North Carolina counties under the microscope.
Much of the information here, however, will also be applicable to the entire state.
What is ARPA?
Federal lawmakers crafted ARPA, signed into law March 11, 2021, with the goal of pulling the nation out of economic distress wrought by the pandemic by improving the country’s infrastructure and offering direct financial relief to families.
While the $1.9 trillion plan funded a third round of stimulus checks and several other tax relief programs, Congress appropriated the majority of ARPA funds — $401 billion — to state, local and tribal governments, according to the U.S. Department of the Treasury.
“The state and local program was designed for short-term and long-term recovery support, including helping localities as new variants of COVID emerge,” U.S. Treasury spokesperson Dayanara Ramirez said.
What did North Carolina get?
North Carolina is slated to receive $8.6 billion in ARPA funding, which is being disbursed two ways.
“There are two pots of money,” said Jamilla Hawkins, chief of staff for the N.C. Pandemic Recovery Office. “North Carolina as a state received $5.4 billion for the state fiscal recovery. For local governments, there’s a local fiscal recovery.”
The $5.4 billion Hawkins referenced has yet to be distributed, as it’s a part of the fiscal year 2022-23 budget, which still awaits certification by the N.C. Office of State Budget and Management.
The ongoing OSBM budget certification process includes reviewing the individual budget plans of each program to which lawmakers allocated funds. Those plans were due Dec. 15, and Hawkins said it usually takes a few weeks for OSBM to certify.
When the budget is certified, the state will dole out funds to state departments and organizations in accordance with Gov. Roy Cooper’s recommendations for the money, which include expanding broadband access, fixing infrastructure issues and addressing housing and employment deficits.
The U.S. Treasury Department has been distributing the other tranche of North Carolina’s ARPA funds — $3.2 billion — directly to North Carolina’s 100 counties and 26 most populous cities.
The Treasury disbursed half of this money beginning in May 2021. The other half comes 12 months after the first payment.
The amount of ARPA money that counties received depended on population, according to a formula set by the Treasury Department, but was also adjusted based on other funding each community received.
The formula for cities’ allocations included consideration not only of population, but also population growth, number of people in poverty and housing-related variables.
County and city government officials will allocate the funds in their communities. All ARPA funds must be spent by Dec. 31, 2026.
“I do think people are really taking their time,” Hawkins said.
“With this funding, you can kind of stop and take your time and really do some good long-term thinking of how you will make an impact on your county.”
What can ARPA funds be used for?
The federal government has rigid guidelines for what ARPA funds can be spent on. Every expense must fall into one of four categories: COVID response and adaptation, premium pay, revenue loss or infrastructure investments.
Examples of acceptable expenses, according to a state Pandemic Resource Office fact sheet, include fixing water and sewer systems, improving pay for essential workers and providing direct economic assistance to small businesses.
Each North Carolina county or municipality that received ARPA funding last summer was required to submit an interim spending report to the U.S. Treasury Department by Aug. 31, 2021.
These reports, however, only cover money spent through July 2021.
“Since then, (the U.S.) Treasury knows that states and localities have only increased their pace of budgeting and spending relief funds,” Ramirez said.
What’s been spent so far?
According to the U.S. Treasury Department, $174,123,543 has been disbursed to the 18 Western North Carolina counties. Asheville and Morganton, the only two cities in the region to receive funds, alone got slightly over $13 million.
Other cities and towns across the region will receive ARPA funding through the state.
By the end of July, Asheville had used about half a million in ARPA funds for housing services, which stands in stark contrast to much of the region. Just six of Western North Carolina’s counties — Buncombe, Cherokee, Haywood, Polk, Swain and Yancey — have spent any ARPA money at all, according to their interim reports.
The documents show the six counties have spent about $1.7 million on COVID vaccination efforts, administrative costs, public health initiatives, broadband expansion and payroll expenses.
That’s only about 1% of the total ARPA money received so far in WNC.
But Ramirez said that shouldn’t be alarming. “Many states and localities have legislative or other governmental processes that they must complete before deploying funds or signing contracts,” she said.
“While this can lead to a delay, it importantly allows for the community to engage on the plans around these historic investments.”
The next due date for ARPA spending reports is Jan. 31 for counties and cities with at least 250,000 residents that received more than $10 million, and April 30 for those with fewer than 250,000 residents receiving less than $10 million.
As of July 31, 2021:
- Avery County received $3,410,241 and spent $0.
- Buncombe County received $50,733,290 and spent $16,433.
- Burke County received $17,575,650 and spent $0.
- Cherokee County received $5,557,546 and spent $72,764.
- Clay County received $2,181,490 and spent $0.
- Graham County received $1,639,565 and spent $0.
- Haywood County received $12,104,347 and spent $256,742.
- Henderson County received $22,806,876 and spent $0.
- Jackson County received $8,534,441 and spent $0.
- Macon County received $6,964,996 and spent $0.
- Madison County received $4,225,654 and spent $0.
- McDowell County received $8,887,567 and spent $0.
- Mitchell County received $2,906,582 and spent $0.
- Polk County received $4,025,394 and spent $91,648.
- Rutherford County received $13,019,597 and spent $0.
- Swain County received $2,771,974 and spent $341,115.26.
- Transylvania County received $6,678,883 and spent $0.
- Yancey County received $3,509,691 and spent $952,606.97.