RSG Solutions

With President Biden’s signature on the American Rescue Plan Act as of Thursday, March 11, 2021, additional federal support will be on the way to help the country recover from the impacts of COVID-19. The $1.9 trillion law will provide major financial relief. Individuals making up to $75,000 annually will receive $1,400 direct payments, small businesses are allocated $50 billion, state and local governments will be distributed $350 billion, K–12 school systems will collect $130 billion to safely reopen, and unemployment benefits will be extended to early September with the additional $300 payments a week.

The second biggest share of funds from the federal stimulus plan will be headed towards state and local governments. The National League of Cities has estimated the allocation from the State and Local Fiscal Relief Funds based off the Senate-passed changes.

A quick summary of the preliminary estimates for California follows. The state will receive $26 billion and must spend the money before the end of 2024. In addition, approximately $7 billion will be divided among the Metro Cities in two tranches, $7.6 billion among Counties, and $1.3 billion among Other Non-Counties—totaling $42.6 billion for California. Here are a few examples: the City of South Gate will get $37 million, the County of San Diego will get $647 million, and the City of Oroville will get $3.9 million.

The first half of those funds would arrive 60 days after the bill’s enactment and the second half one year later. According to the Senate-passed changes, the Treasury will send the money for small cities and rural counties to the state on the same stated timeline, allowing the state 30 additional days to disperse.

Despite lobbying efforts to bring funds to other public agencies, none of the American Rescue Plan Act funding will be directed to special districts, some of whom have endured extensive fiscal and service challenges.