States Aren't Quite Sure What To Do With Their 'Stimulus Checks'

States Aren't Quite Sure What To Do With Their 'Stimulus Checks'

The American Rescue Plan Act injected huge sums of money into the economy.

Here's What You Need to Know: Debates have broken out over the distribution of stimulus funds from the American Rescue Plan.

How to best allocate the money from the American Rescue Plan that they have begun to receive is a question clearly on the mind of government officials these days. The Recovery Act dedicated $350 billion to money for state and local governments.

The Pew Charitable Trusts, in late May, held a webinar looking at those questions, including what to spend the money on, how far in the future it should be spread, and what lessons can be gleaned. The webinar used the headline “States Can Use Federal Stimulus to Safeguard Fiscal Health, Expand Broadband Access.”

Those participating included Pew’s Adam Levin, who talked about what happened when aid to local governments expired following the passive of the American Recovery and Reinvestment Act, early in the Obama Administration.

“What lawmakers should do is analyze revenue and expenditures over the long term, and plan for a range of post-ARPA scenarios,” Levin advised.

Another expenditure suggested by the panelists was for states to invest in broadband access. The Recovery Act makes funds available specifically for that purpose.

“The ARPA funds present a significant opportunity for state leaders,” the Pew blog post said.

"Stimulus money can be used to strengthen state fiscal health and invest in long-term infrastructure, such as broadband. States can prepare to receive—and allocate—the federal funds by creating forward-looking investment plans and by taking a long-term perspective on revenue and expenses. By acting responsibly now, policymakers can ensure that they make the most of this opportunity.”

In addition to the $350 billion for state and local governments, the $1,400 checks, and the enhanced unemployment, the American Rescue Plan Act injected $130 billion for the reopening of K-12 schools; and billions for small businesses.

Earlier this spring, some states were complaining that they were still waiting on instructions as to how the distribution of the money would work.

"There's just this wide berth of interpretation in the (legislative text) and that's why we're a little anxious to see if the Treasury guidance makes limitations or if it allows for greater opportunity,” Emily Swenson Brock, director of the Government Finance Officers Association’s Federal Liaison Center, told Reuters at the time.

Meanwhile, NPR reported this week that GOP officials in some states are fighting the Biden Administration over the distribution of stimulus funds from the American Rescue Plan.

One Republican official, per NPR, said that “Republicans are concerned the Biden administration is using the pandemic to justify unrelated big government spending, and that's why they're frustrated with the restrictions on state aid at a time when the Biden administration is trying to push a separate infrastructure bill.”

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

This article first appeared earlier this month.

Image: Reuters