As one of the many public finance observers who began beating the drum for federal fiscal assistance to states and localities facing big revenue losses and increased expenses, I was admittedly impressed that Congress finally stepped up to the plate with $350 billion in sensibly conditioned state and local aid funds as a key component of the $1.9 Trillion American Rescue Plan Act, signed into law by President Biden March 11. A little over two month later this historically large and complex intergovernmental transfer program window is fully set up and open at the Treasury. See the details of all the legally mandated allocation formulae as well as the actual dollar allocations to the different levels and types of authorized recipient governmental entities here: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recovery-funds.
So hat's off to a lot of hard-working Treasury Department political appointees and civil servants for being able to stand up and start executing this program so swiftly.
And now we learn from today's (5/20/2021) Treasury Department press release, that they've actually been able to get about 30% of that $350 Billion ($105 Billion) out the door and into the accounts of the authorized recipient state and local entities. BRAVO!
Let's keep in mind that this Treasury administered program is in addition to the US Department of Education/state government-administered $121 Billion fiscal transfer program also created and funded by the ARP: the "Elementary and Secondary School Emergency Relief (ESSER) funding that each State, Puerto Rico, and the District of Columbia will receive "to support their efforts to reopen K-12 schools safely," per the Department's announcement of March 17 and the extensive subsequent disclosure on ESSER (ESEA TitIe I-based distribution formula and resulting planned allocations to all state Education Agencies (SEA's).
While the Education Department has published this Table showing how much each SEA can expect e to receive under ESSER, neither the Treasury nor the Education Department appears to have announced how much of this $121 Billion has actually gone out the federal door and reached the SEA's. Nor can I find a source of data on the dollar amount allocations to be made by SEAs to local school districts, although we do know that SEAs must distribute at least 90% of ESSER funds to local education agencies (LEAs) based on their proportional share of ESEA Title I-A funds.
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So the states and localities are starting to have to drink from the ARP fiscal fire hose that the federal departments have quickly and efficiently aimed at them. How wisely and effectively they will use this money is the remaining $471 Billion Question that is likely to keep downtown- and Capitol Hill-Washington and state level watchdogs burning the midnight oil for moths and years to come. ACIR II, anyone?
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