Following through in NC on the American Rescue Plan’s promise of equity

The American Rescue Plan Act (ARPA) was part of an ambitious anti-austerity response to the COVID-19 pandemic. Although the US economy lost over 22 million jobs in just two months — more than double the number of jobs lost in the 2008 financial crisis — ARPA and other stimulus packages paved the way to recover those jobs in just over two years. By comparison, it took more than a decade to recover all of the jobs lost from the 2008 crisis.

But what made ARPA so significant was not just its magnitude and effectiveness in averting a prolonged depression but also the $350 billion that it gave directly to state, local, and tribal governments to spend at their discretion to provide immediate COVID relief and ensure a strong, resilient, and equitable recovery.

In line with President Joe Biden’s Executive Order on Advancing Equity, the US Department of Treasury set out equity guidelines that encouraged recipients to direct these resources toward low-income and disadvantaged communities that had been disproportionately impacted by the pandemic, including to address the structural inequities underlying this disproportionate impact. Moreover, these guidelines recommend that governments engage members of underserved communities in deciding how best to use their ARPA dollars. Larger jurisdictions were required to report on how they used their funds to advance economic and racial equity.

Local governments used ARPA funds to advance a wide variety of equity goals

The flexibility that local governments had in using their ARPA dollars is evident in the diverse ways that cities and counties in North Carolina spent these funds. For instance, many governments extended bonuses and premium pay to frontline workers, as well as extending relief aid to small businesses to help them survive the pandemic. Other more creative examples of these ARPA dollars at work include:

• Alexander County invested $7.3 million to expand its water system to residents who lacked access to a reliable water source.
• Mecklenburg County invested $3.2 million to purchase and staff a clinic that provides mental and behavioral health services to people with low and moderate incomes.
• The City of Wilmington invested $2.5 million in digital skills training and a job placement program.
• Wake County invested $2.8 million to support education, employment, and living expenses for people leaving incarceration.

There are literally hundreds of examples across the state, which you can learn more about in our story map here, as well as here and here. In short, ARPA did much to deliver on its equity promise.

ARPA was a vital anti-austerity response to the pandemic, but it was far from perfect

Many cities and counties used a robust community engagement process to inform their ARPA spending priorities and gave residents the opportunity to play a role in the decision-making. For example, the City of Greensboro established clear equity principles and an equity framework for evaluating project proposals, both of which were made publicly available. Greensboro also opened proposal applications to the public and offered several virtual opportunities for community members to receive application assistance at a variety of different times and days of the week. In contrast, the NC General Assembly chose to spend nearly all its $5.4 billion ARPA allotment as part of the state budget without any community input in an opaque, closed-door process, without any clear principles or framework to guide its decisions.

To overcome these limitations and sustain momentum, governments must codify ARPA’s equity guidelines into law, expand them, and incorporate compliance requirements. State and local governments don’t need to wait for the federal government to do this. North Carolina state and local legislators can lead the way, continuing to deliver equitable outcomes and demonstrating their commitment to being accountable to all their constituents.

Nearly $430 million local ARPA dollars may remain to be obligated in North Carolina

As of the most recent US Treasury report from June 30, 2024, local city and county governments across the state still had nearly $430 million in ARPA funds “unobligated”. If these dollars are not obligated by December 31, 2024 (roughly this requires placing an order or entering into a contractual agreement to spend these funds), then the funds will be returned to the US Treasury.

Note that government recipients with populations less than 250,000 are only required to report annually on their ARPA dollars, so the most recent data from these smaller localities extends only through March 31, 2024. Because of this and the fact the latest US Treasury data extends through June 30, 2024, some of these local governments may have since obligated additional funds beyond what this data shows. But it’s also important to note that obligating ARPA dollars requires more than including them in a city or county budget. People looking to confirm these funds’ status can contact their own local city and county governments for the most recent information about ARPA dollars and advocate that any remaining funds get used.

There are plenty of ways that governments in North Carolina can use these ARPA funds. Most obviously, these dollars could be dedicated to disaster relief in the aftermath of Hurricane Helene, for instance, to rental assistance that Western North Carolinians desperately need. But there are other worthwhile purposes as well, such as one-time bonuses for public employees, funding for childcare programs, the creation of resiliency hubs in disaster prone areas, investment in affordable housing and shelter infrastructure to support the unhoused, or even medical debt forgiveness. There’s no shortage of need in North Carolina, but local governments must act before the end of 2024 so that these funds are not returned to the US Treasury.