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.
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.
The Brookings Institution
by Alan Berube, Peter Frosch, and Allison Bell
August 30, 2022