The U.S. Department of the Treasury issued the final rule for the State and Local Fiscal Recovery Funds (SLFRF) program, which delivers $350 billion to state, local, and Tribal governments to support recovery from the COVID-19 pandemic.
The SLFRF program, enacted as a part of the American Rescue Plan, seeks to provide local governments with the necessary health and vaccine services. It also seeks to support families and businesses struggling with the pandemic’s economic impacts, help localities maintain vital public services, and build a strong and equitable recovery.
Currently, Treasury has distributed more than $245 billion to state, local, and Tribal governments as a part of the SLFRF program. Recipients of the funds were encouraged to begin using funds under the interim final rule, which was released in May 2021. A recent analysis by the Center on Budget and Policy Priorities found that state governments have appropriated nearly 70% of their available funds as of November 2021.
“Through the State and Local Fiscal Recovery Funds, the American Rescue Plan has provided state and local governments with the support they need to respond to the ongoing pandemic and plan for an equitable recovery,” Deputy Secretary of the Treasury Wally Adeyemo said. “As the Delta and Omicron variants have illustrated, pandemic response needs will continue to evolve. These funds ensure that governments across the country have the flexibility they need to vaccinate their communities, keep schools open, support small businesses, prevent layoffs, and ensure a long-term recovery.”
The final rule, which takes effect on April 1, 2022, will offer state and local governments increased flexibility to pursue a wider range of uses. For example, the funds can be used for certain capital expenditures to respond to public health and economic impacts. It can also be used to make services like childcare, early education, learning loss, and affordable housing available to all communities impacted by the pandemic.
Also, Treasury has expanded support for public sector hiring and capacity, which is critical for the economic recovery and maintaining vital public services for communities.
Third, the funding can provide premium pay for essential workers, who bear the greatest health risks because of their service in critical sectors.
Finally, Treasury has broadened eligible water, sewer, and broadband infrastructure projects, recognizing the importance of delivering clean water and high-speed broadband to communities.