In a party-line vote over the weekend, the Senate passed the American Rescue Plan Act, moving it one step closer to reality.
First proposed by President Biden in January, the Rescue Plan Act provides $1.9 trillion in funding for COIVD-19 mitigation, reopening schools, support for unemployed workers, and state and local governments. While the Senate adopted several amendments
removing the $15-hour minimum wage and adjusting weekly federal unemployment benefits, funds for cities were not touched. This means, if the plan is enacted, in the coming months cities across the country will share $65.1 billion in federal emergency
aid to mitigate the negative impacts of the COVID-19 pandemic.
Under the bill, cities will receive funding depending on their population size:
- Metropolitan cities, defined as cities with 50,000 inhabitants, will share $45.57 billion. The bill clarifies that the definition of metropolitan cities includes all cities over 50,000 inhabitants, even those that have deferred receiving
direct Community Development Block Grant funding. Metropolitan cities will receive funds directly from the Treasury.
- Non-entitlement cities, defined as cities with fewer than 50,000 inhabitants, will share $19.53 billion. Cities in this category will receive their funds through the state. Additionally, allocations for these cities will be capped
at 75% of their most recent city budget adopted as of January 27, 2020.
Under the act, cities are authorized to use federal funds to:
- Respond to the COVID-19 pandemic.
- Cover costs incurred as a result of the public health emergency.
- Replace lost, delayed, or decreased revenues due to COVID-19.
- Address the negative economic impacts of the pandemic.
- Make necessary investments in water, sewer, or broadband infrastructure.
Cities will have the authority to transfer funds to private nonprofit organizations, public benefit corporations, or special units of local or state government.
Cities will receive their allocations in two tranches: the first tranche will be available to cities between 60 – 90 days after the bill passes; the second tranche will be available 12 months after the first tranche is distributed. Details on how
cities can request access to these funds are forthcoming.
Cities will have until December 31, 2024, to spend federal dollars.
The Senate version of the bill also created a $750 million fund for states and communities impacted by job and revenue loss in the tourism, travel, and outdoor recreation sectors. The way in which those funds will be distributed is still unclear; however,
we expect the funds could greatly benefit many communities in Washington.
The bill now heads back to the House for a confirming vote before heading to President Biden’s desk for signature.
AWC thanks all the cities that have worked hard to advocate for funding at the federal level. We are also grateful for the support of Sen. Maria Cantwell and Sen. Patty Murray who both voted in favor of the Rescue Plan.
AWC invites all city officials to attend an upcoming briefing with Sen. Patty Murray and Sen. Maria Cantwell on Wednesday, March 10 at 11 am. During the
meeting, AWC staff will discuss our federal priorities and delve deeper into the topic of federal COVID-19 response.