The Treasury Dept. has begun to take applications from state and local governments for the $350 billion that the American Rescue Plan Act earmarks to help them recover from the coronavirus pandemic, the department announced on May 10.
Among the many eligible uses for the funds are “water, sewer and broadband infrastructure,” according to the legislation, which Biden signed March 11. But it will be up to governors, mayors and state and local officials to determine how they will use the funds.
Construction and transportation officials say that road projects also qualify for the rescue act.
They note that Treasury's interim final rule implementing the state and local aid program says funding recipients have “broad latitude” to use the recovery dollars to provide government services.
The rule says those services can include maintenance or non-debt-funded “building” of infrastructure. Such infrastructure, it adds, includes “roads."
AASHTO, ARTBA Comments
Susan Howard, the American Association of State Highway and Transportation Officials' program director for transportation finance, said in an interview, “I believe that that language opens the way for transportation to be an eligible expense.”
Dean Franks, American Road & Transportation Builders Association senior vice president for government relations, said in a statement to ENR that ARTBA is “initially encouraged that states and localities will have broad eligibility to use their portion of the $350 billion enacted in the American Recovery Plan to restore lost revenue for transportation projects."
But Franks adds that “it should not be viewed as a substitute for the robust, multi-year surface transportation reauthorization and broad infrastructure packages that President Biden and members of Congress say is critical to the nation’s economic recovery.”
On March 28, ARTBA, AASHTO and more than 30 other transportation and construction groups had written to Treasury Secretary Janet L. Yellen, requesting that the department deem highways and other transportation infrastructure projects as eligible for rescue act funds. [View 3/29/2021 ENR story here.]
The American Water Works Association was happy to see water infrastructure designated as eligible for American Rescue Plan aid, says Tommy Holmes, AWWA legislative director.
Holmes said via email, “Given the scope of need to update and replace aging water infrastructure and to replace lead service lines and prepare to treat for PFAS compounds, any additional federal assistance is appreciated.”
But Holmes says there is a concern that municipal water utilities would have to go through their city governments to seek rescue funding. He notes, “We know there may be significant competing needs within many municipalities.”
Holmes adds it’s unclear how regional water authorities would apply for the assistance, saying, "They may be able to apply to state government agencies that are handling these funds.”
Kristina Surfus, National Association of Clean Water Agencies' managing director for government affairs, sees water infrastructure's eligibility for the rescue act funding as "quite significant" for two reasons. Surfus says it provides "a pot of funds open to water infrastructure" and also indicates that water, like broadband,"secured greater federal attention during the pandemic as critical infrastructure."
But she adds that whether individual water utility agencies actually get some rescue act dollars "will vary significantly."
Surfus said via email that some utilities are agencies of local government bodies that will receive specific funding allocations under the statute "and water investment may be determined to be a top local priority for these funds."
On the other hand, she adds, "In many other communities, competing demands for these funds—COVID-19 relief, general governmental lost revenues, etc.—may far outstrip demand, and jurisdictional issues can complicate issues further. And in such cases water projects may not see any of these funds."
Treasury Secretary Janet L. Yellen said in a statement, "With this funding, communities hit hard by COVID-19 will be able to return to a semblance of normalcy; they’ll be able to rehire teachers, firefighters and other essential workers—and to help small businesses reopen safely."
Gene Sperling, President Joe Biden’s coordinator for implementing the rescue plan, told reporters in a May 10 briefing, “This is ensuring that those state and local governments are able to not just bounce back, not just build back, but as somebody I know says: 'Build back better and build back quickly.'"
Dividing the Funds
Of the $350 billion, the states and District of Columbia will receive $195.3 billion. Treasury will provide funding to most states in two installments, with 50% available in May and the other 50% in May 2022.
Florida has the largest state allocation, with $1.42 billion, followed by Texas, with $1.39 billion, and California, with $1.22 billion.
Counties will get $65.1 billion and metropolitan cities will receive $45.6 billion.
Among cities, New York City's allotment is the largest, at $4.26 billion.
Tribal governments' share is $20 billion and the allotment for territories is $4.5 billion. Other local government units will receive $19.5 billion.