The 2021 American Rescue Plan Act (ARPA), particularly the flexible dollars it made available to state and local governments through State and Local Fiscal Recovery Funds (SLFRF), marked a generational experiment in fiscal federalism. Not since the late 1980s has Washington engaged in general revenue sharing with state and local governments. And this time, the scale of investment—$350 billion distributed over two years—was far greater.
Interim Vice President and Director - Brookings Metro
CEO - GREATER MSP
Founder/CEO - Bellwether Consulting
The context for ARPA was also far different. Congress appropriated substantial aid to help counteract potentially devastating fiscal, economic, and health impacts of the COVID-19 pandemic at the state and local levels. Under the regulations implementing SLFRF, recipient governments must report information to the Treasury Department on how they are planning to use these funds, consistent with a set of broad categories of eligible spending under ARPA. However, much of that information varies in quality, consistency, coverage, and comparability, hampering efforts to understand spending priorities and better coordinate investment across places and time in support of a broad-based economic recovery.
These factors motivated our respective organizations—Brookings Metro and GREATER MSP—to create tools that gather, summarize, and visualize how local governments are putting SLFRF dollars to work. Brookings Metro partnered with the National League of Cities and the National Association of Counties to produce the Local Government ARPA Investment Tracker, which tracks data on SLFRF-supported projects in more than 300 large cities and counties around the country. And as part of its MSP Federal Funding Hub project, GREATER MSP partnered with 12 cities and 17 counties in the Minneapolis-Saint Paul region to generate the MSP ARPA Tracker, which tracks those jurisdictions’ spending plans using the same categories as the Local Government ARPA Investment Tracker. Our organizations have used these tools to assess the rate at which local governments are committing SLFRF dollars to specific projects, the broad spending priorities they are identifying, and how these vary across cities and counties and by jurisdiction size.
We see three common benefits to sharing these unique data through our respective Trackers:
- Increasing government transparency. Local decisionmakers have tremendous discretion around how to use SLFRF dollars, consistent with the goal of advancing a robust and equitable recovery from the pandemic economic crisis. And while local governments are required to publicly report on their use of the funds, communication and community engagement vary widely. Some cities and counties have robust ARPA websites and communication strategies, while others have none. The Trackers fill the gaps and provide taxpayers, policymakers, the media, and researchers with an easy-to-use window into how local governments are putting the funds to work. This helps answer questions such as: Are cities and counties investing the funds in communities that were most impacted by the pandemic? Are they addressing both short-term acute needs and longer-term challenges the pandemic exacerbated? What kinds of agencies and organizations are they working with to deliver ARPA-funded programs and services? Making the data consistent and transparent through Trackers like these also offers a possible model for following how dollars are allocated from other large federal programs that rely on local delivery, such as those funded under the Infrastructure Investment and Jobs Act (IIJA), and increasing understanding and engagement around the realities of American fiscal federalism.
- Enhancing regional focus and collaboration. The MSP ARPA Tracker found that the region’s local governments had committed 25% of their SLFRF dollars thus far to meeting the housing needs of lower-income residents. That was nearly three times the average recorded across all large cities and counties in the Local Government ARPA Investment Tracker. The Twin Cities region’s outsized effort resulted from long-standing efforts by GREATER MSP and its partners to highlight mounting affordable housing pressures and create relationships and vehicles that could begin to address those challenges at scale. Benchmarking how local governments are deploying ARPA funds can reveal where communities may be over- or under-indexed on spending relative to local or national norms, and help local decisionmakers and the public ask more informed questions about meeting unique needs. In addition, promoting greater understanding of how neighboring jurisdictions are putting their dollars to work may create opportunities for co-investment in shared programs and strategies. For instance, the city of Minneapolis is collaborating with surrounding Hennepin County in using ARPA funds to make public health upgrades to its emergency homeless shelters. Similarly, suburban Washington County and Dakota County are co-investing ARPA funds in a youth homeless shelter. Boundless opportunities exist for interjurisdictional or state-local collaboration with uncommitted local ARPA funds, which the Trackers can spotlight.
- Adding up investments to chart longer-run impact. Local governments have through the end of 2024 to fully obligate their flexible ARPA funds, and then another two years to ensure they are fully expended. How will we know whether the funds made a difference at the end of the day? Tracking the specific ways in which local governments are putting them to use can help us understand whether the dollars ultimately reduced evictions or food insecurity, improved broadband connectivity and community safety, stabilized long-term local finances, or achieved dozens of other outcomes of interest at multiple potential levels of impact (local, regional, state, national). For local leaders who hope to make the case for future flexible federal aid in times of economic crisis, leveraging these data can build a valuable evidence base.
Brookings Metro and its partners and GREATER MSP will continue to update our Trackers with new data as it becomes available. In both the Twin Cities region and other cities and counties across the country, local decisionmakers still have significant SLFRF resources they have yet to budget and spend. By shining a spotlight on their efforts, we hope to inform their decisions in ways that increase the program’s impacts and broaden awareness of opportunities to support equitable growth and prosperity in the pandemic’s wake.