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Ten impactful uses of American Rescue Plan funding

Feb. 8, 2022

State and local governments have a significant opportunity to support their economic resiliency through the landmark funding of Fiscal Recovery Funds from the American Rescue Plan Act of 2021 (ARP). With the passage of the Final Rule in early January, the United States Treasury Department provided considerably more flexibility with the use of Fiscal Recovery Funds than previous guidance had allowed.

Having such a large, positive fiscal jolt to state and local budgets and the news of greater flexibility with the use of the funding, Baker Tilly recognizes the importance of wise investments, strategic planning and informed choices. To that end, we offer this list of ten impactful funding uses to help guide your journey.

Read our article about ARP Final Rule key provisions Learn seven key highlights of the ARP Final Rule

1. Solicit stakeholder and resident input to prepare your ARP funding plans

Due to the flexibility of ARP funding, it is now more important than ever to make community outreach and stakeholder engagement a core component of your organization's approach to the allocation of Fiscal Recovery Funds. You can accomplish this by creating and implementing an outreach plan tailored to your community that includes a mix of stakeholder meetings, focus groups, online surveys, and community meetings – the expenses for which may be eligible uses of your Fiscal Recovery Funds.

2. Prepare a long-term “post-pandemic” financial plan

Fiscal Recovery Funds provide diverse financial opportunities for state and local governments, making it essential to have a plan that maps out ways to best allocate those resources and maintain services long after the relief funds are expended. This injection of shorter-term funding underscores the need for local units of government to extend planning horizons beyond one year. A long-term financial and capital planning approach provides a living document that is adjustable as new information becomes available. The long-term approach allows local governments to take the initiative to strategically identify, prioritize, and fund expenses and projects over the long-term.

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Ten impactful uses of American Rescue Plan funding

1. Solicit stakeholder and resident input to prepare your ARP funding plans

2. Prepare a long-term “post-pandemic” financial plan

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3. Strengthen your local economy by preparing strategic economic development plans and housing strategies

4. Improve your recruitment and compensation systems to address impacts of the “Great Resignation”

5. Reduce operational costs by investing in technology

6. Evaluate ARP funding proposals by analyzing project funding sources and fiscal/economic impacts

7. Address deferred maintenance through an infrastructure assessment and asset management plan

8. Conduct a cybersecurity and/or IT risk assessment to safeguard your organization’s information

9. Prepare for your post-pandemic federal compliance audit

10. Seek support to identify and apply for additional state and federal funding for your strategic objectives

We'll meet you where you are in your funding journey

Additional ARP insights

American Rescue Plan: Final Rule – seven key highlights

American Rescue Plan Final Rule key provisions: what local governments need to know

American Rescue Plan resources for public sector