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COVID-19 Update: U.S. Treasury Releases ARP Funding Guidance, May 10, 2021

May 12, 2021 | Legislative briefs

On March 11, President Joseph R. Biden, Jr., signed H.R. 1319, the American Rescue Plan (ARP) Act of 2021, into law. The new law will distribute $1.9 trillion in direct stimulus payments for state and local governments, agriculture and nutrition programs, schools and institutions of higher education, child care, COVID-19 vaccinations, mental health and substance-use disorder services, among other provisions. A title-by-title summary of the law is available via this link.

Included in the law is $65.1 billion in financial assistance for all municipalities, nationwide. Of that, $45.57 billion will be allocated to metropolitan cities, which either are the central city of a metropolitan area or have a population above 50,000, and will be distributed based on the Community Development Block Grant (CDBG) formula. The remaining $19.53 billion will be sent to state governments to distribute directly to non-metropolitan (non-CDBG) municipalities based on population. For non-metropolitan (non-CDBG) municipalities, the amount of funding a municipality may receive is capped at 75% of the municipality’s pre-pandemic budget as of January 27, 2020.

On March 10, the Illinois Municipal League (IML) received from the U.S. Department of the Treasury the allocations and guidelines regarding how funding can be used in line with ARP. The Treasury Department’s press release announcing the guidelines is available via this link.

The Treasury Department’s guidance providing additional information regarding eligible uses of the funding is available via this link.

It should be noted that these guidelines only apply to funding from ARP, not prior funding from the federal CARES Act that a municipality may have received through their county or the state’s Local CURE program.

The allocations for metropolitan (CDBG) municipalities in Illinois are available via this link.

More information regarding the allocations for non-metropolitan (non-CDBG) municipalities in Illinois will be available via this link. The U.S. Treasury Department plans to provide further guidance on distributions to non-metropolitan communities in the coming days. Linked here are the most recent allocation estimates for non-metropolitan municipalities as of March 8; this information is likely to change, as the final Treasury Department allocations have not yet been provided at this time.

On March 9, IML sent a letter to Governor JB Pritzker (available via this link) urging him and the General Assembly to expedite the legislative work necessary to ensure that funding is distributed to municipalities without delay or additional state-imposed restrictions or reductions.

Payments to municipalities will be split between two rounds of funding. The first round of funding is required to be distributed by the federal government no later than 60 days after ARP’s enactment. For non-metropolitan (non-CDBG) communities that will receive their funding from the state, there will be additional time allotted for the state to distribute that funding. The second round of funding may not be distributed earlier than 12 months after the first round distribution, meaning sometime in spring or summer of 2022.

As more information becomes available regarding ARP funding and guidance, IML will share that promptly.

IML is posting all of this information and more on our COVID-19 resources page available at iml.org/covid.

The Illinois Municipal League will continue to distribute timely, reliable and pertinent information as it becomes available or on an as-needed basis. Please feel welcome to share these messages with municipal officials and others in your community. As always, thank you for your dedication to your community.

Illinois Municipal League

iml.org

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