$195 billion of federal rescue money is going to U.S. states. Here’s how some plan to use it

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As funds from the massive American Rescue Plan flow from Washington to cities and states, elected officials are busy mulling how to spend the money.

The 50 states and Washington, D.C. will receive $195 billion, and among the proposals made public so far, there there are some common themes, and some local quirks, as well. Governors are keen to spend big on broadband internet infrastructure, recognizing how vital it is for all walks of life, and many are also glad to have money for water projects.

Meanwhile, many states are prioritizing tourism, even as others simply want help keeping residents from moving out of state.

Here’s a round-up of several state spending plans, based in large part on a similar effort created by the National Association of State Budget Officers, as well as some additional reporting by MarketWatch. (Here’s an earlier round-up on city and town expectations for the funds.)

North Carolina will receive $5.7 billion, and Governor Roy Cooper proposes spending $1.2 billion on broadband “access and affordability to close the digital divide.” He wants to commit $800 million to drinking water and wastewater infrastructure, and $575 million to increasing access to affordable housing, including with down payment assistance to first-time buyers. And he recommends investing $350 million in the NC Guarantee Scholarship, a program that promises students from families making $60,000 a year or less at least $6,000 per year to cover the cost of attending any UNC institution or NC community college or a smaller award to attend a private college.

Vermont Governor Philip Scott proposes allocating $143 million to economic development, $200 million to climate change upgrades, $170 million to water and sewer infrastructure, $249 million to housing, and $251 million to “connectivity,” a category which includes broadband. Among economic development projects, the state will ask the Boston Fed to work with four communities to help them attract and retain a working population. The governor also wants to fund “transformational outdoor recreation destinations to seize the growing market of outdoor enthusiasts and make Vermont and Vermont’s hospitality businesses their favorite destination.”

In Wisconsin, Governor Tony Evers in March proposed $50 million for the tourism industry, and $600 million to help support local businesses, building on the successful “We’re All In” small business grant. The governor also wants a $200 million investment in infrastructure, “a significant portion of which will go towards expanding broadband access,” he said. Evers, a Democrat, has clashed with the Republican-led legislature over allocating the funds. In 2020, 43 Republican state lawmakers urged the state’s congressional delegation to block federal funds from flowing to states, which they called “bailouts for irresponsible states across the country, like Illinois, New York and California.”

Republican Governor Larry Hogan of Maryland wants to devote $1.1 billion of that state’s funding to “shoring up the state’s Unemployment Insurance Trust Fund to help stabilize unemployment insurance tax rates for businesses for calendar years 2022 and 2023.” He proposes allocating $500 million to state transportation department to improve services and infrastructure, and putting $300 million toward major investments in broadband technology. Hogan also wants funding for needy residents, including $50 million to pay arrears for Marylanders struggling with utility bills, and $75 million for various apprenticeships and training programs.

See: In one chart, how U.S. state and local revenues got thumped by the pandemic — and recovered

In Louisiana, Democrat John Bel Edwards also intends to spend big to shore up his state’s unemployment resources, including by paying off a federal loan and shoring up the state’s trust fund. He proposes $400 million for broad infrastructure, $300 million for water and sewer infrastructure, $145 million for tourism and hospitality spending, and $50 million for the ports.

It’s not the biggest allocation in Connecticut Governor Ned Lamont’s plan, but “early childhood and family needs” is right on top. The pandemic, the governor wrote, “has de-stabilized the child care industry, placed economic strain on families with young children, and heightened the need for high-quality child care and early education opportunities,” largely to help parents get back to work. The governor also prioritizes K-12 programming, including summer camp and work opportunities, investing in behavioral and mental health, and criminal justice initiatives like cutting the criminal case backlog and community gun violence strategies.

In contrast, Colorado Governor Jared Polis uses a broader brush. Polis, a Democrat, expects to spend $1 billion of the state’s $3.8 billion allocation to “fortify” the budget in “priority areas such as K12 education, housing, employee compensation, thus protecting funding in tight economic times,” he notes. About $550 million will go to housing projects, including building new residential stock and “addressing” homelessness. And nearly $400 million will be devoted to a “modernization of transportation funding.”

Read next: Local-government employment in the U.S. is at a 19-year low



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