How to spend this stimulus money

By Mike Genet
The Examiner

Less than two weeks after the enactment of American Rescue Plan, the latest stimulus fund from the federal government totaling $1.9 trillion, local governments don’t yet have firm plans on how they’ll spend their allocations.

By all indications, though, they’ll have more money to spend and more leeway and time on how to spend it than last year’s CARES Act, which provided an immediate boost as cities and counties scrambled to deal with sudden pandemic-related hardships and help some citizens do the same.

According to information from the U.S. Mayors Conference and the office of U.S. Representative Emanuel Cleaver, D-Kansas City, early estimates show that Jackson County will receive more than $136.3 million in American Rescue Plan funds. Independence will receive about $20.3 million, Blue Springs $6.7 million, Lee’s Summit $9.2 million, Grain Valley $2.6 million, Oak Grove $1.5 million and Sugar Creek about $600,000.

Independence Mayor Eileen Weir said last week that while she hadn’t dived deeply into the number, the work city officials did last summer identifying needs for spending should make it easier to develop a priority list this time around.

The city’s largest CARES Act allocation went to utility ratepayer assistance, followed by public health expenses, personnel and social distancing costs and public testing.

“We’ve been pretty clear about our priorities,” the mayor said. “I would look at our original proposal to Jackson County, and the need is still huge.”

Christine Cates, assistant city administrator for Blue Springs, said the city is still gathering data and determining allowable uses, but she had seen a similar estimated fund amount for the city. Blue Springs’ top priorities last time were personnel and public health costs.

“We are still learning new information every day,” Cates said.

Among Jackson County’s top uses with CARES Act funds were additional health department costs, personnel expenses and aiding social service agencies with programs such as food and rental assistance.

Whereas CARES Act funds from late spring last year went to states, which funneled portions to counties and the largest cities, and counties decided how to distribute to smaller cities and maintain for themselves, American Rescue Plan funds will come more directly from federal agencies. Local governments will get two equal payments – one in May, 60 days after the stimulus plan was signed – and the second half a year later. Funding must be spent by the end of 2024.

With the CARES Act, cities had to use funds for expenses incurred because of the pandemic and not budgeted prior to that. They had to spend the money or have it under contract by the end of 2020.

Eligible uses this time include:

• Revenue replacement for government services relative to how much the pandemic affected those revenues.

• Premium pay for essential workers.

• Assistance for small businesses, households, hard-hit industries and economic recovery.

• Investments in water, sewer and broadband infrastructure.

Across the country, the local portion of stimulus funds is about $130 billion, equally divided among cities and counties. For the cities more than $45 billion of the $65 billion will be allocated to cities with a population over 50,000 (in Eastern Jackson County, that’s Independence, Blue Springs and Lee’s Summit), using a formula similar to how annual Community Development Block Grant funds are allocated. The remaining city funds will be allocated based on population, but they won’t exceed 75 percent of the city’s most recent budget as of late January 2020. For counties, the $65 billion will generally be allocated based on population.

There are two notable restrictions for using funds: They cannot be used to offset tax reductions or delay a tax or tax increase; and they cannot be deposited into any pension fund.

Independence couldn’t use CARES Act funds to shore up a budget shortage that would’ve cut bus routes within the city, but the Kansas City Area Transit Authority covered the difference from some of its federal aid allocation. Weir said at the time the one-year band-aid was vital, but a feasible long-term solution had to be part of a metro area discussion.

The results of last year’s presidential election, she said, provide “an opportunity to look at regional priorities” such as transit service.