The American Rescue Plan Act (ARPA) was passed on March 11, 2021 and allocates $673 Billion to support state and local governments through the COVID-19 pandemic, with over $375 Billion of these funds assigned to infrastructure-related spending. Here, Citylitics explores insights relating to the allocation of ARPA funding across local authorities in the U.S.

When and Where will Funds be Allocated?

Sec. 9901 of the ARPA allocates an estimated $335.5 Billion towards water, sewer, and broadband infrastructure. In addition, sections 3401, 7101, and 7102 provide $40+ Billion for transportation, including operating expenses, new roads, rail, public transit, and airports.

Municipal and local government documents collected by Citylitics indicate that funds are already being awarded, with some having been committed as early as April 2021. Of the $375 Billion in total funding for infrastructure, $225.5 Billion are assigned to the State and Local Fiscal Recovery Funds, both of which are to be expended before the end of 2024. Transportation funds will be distributed on an even shorter timeline, with the majority of funds awarded by January 2022.   

How Will State and Local Governments Allocate ARPA Funds?

In most cases, the specific allocation of ARPA funds is being coordinated by state and regional authorities & planning bodies who are developing programs for the equitable and efficient allocation of these funds. In addition, an analysis of public documents collected by Citylitics indicates that some local governments have begun to form committees to discuss the ARPA and define their priorities for local infrastructure development. Many of these are already seeking professional guidance to define their infrastructure needs and explore funding options. The State of Wisconsin has been one of the most effective in coordinating the distribution of ARPA funds. As of June 18, the State’s application deadline, over half of the 1830 eligible municipalities across the State had filed an application for their share of the State’s $3 Billion allotment. Citylitics’ data warehouse, which contains over 1.4 billion documents drawn from 29,000+ cities and utilities, indicates that Vermont, Michigan, Pennsylvania, and California are all additional states where the ARPA is being discussed in relation to upcoming infrastructure priorities and opportunities.

What Types of Projects are Being Discussed and Where?

While some municipalities have already received confirmation of incoming ARPA funding, including Contra Costa County, CA ($300 Million) and Paducah, KY ($6.5 Million), others are still in the early stages of discussion.  Since the ARPA allocates a majority of its infrastructure spending to “water, sewer, and broadband”, these have been the most prevalent topics of discussion among local and state governments. In particular, its emphasis on broadband has led many local authorities to consider expansions to their existing telecommunications infrastructure. Based on Citylitics’ analysis, among those local governments discussing the ARPA in relation to infrastructure, over a quarter referenced the broadband or telecommunications component of the ARPA, with another third discussing water and a quarter for sewers and wastewater.

Further Reading

• Analysis of ARPA by the Council of State Governments
• The American Rescue Plan Act
• Wisconsin Department of Revenue – ARPA
• Pew – How Far American Rescue Plan Dollars will Stretch Varies by State

Summary

This landmark moment in the U.S. infrastructure industry means that now, more than ever, Suppliers, Consultants, and Engineers need to arm themselves with the right insights and context to engage public administrations in an effective and informed manner. Citylitics offers a range of data products to provide professionals in the infrastructure industry with the early-stage insights they need to position themselves effectively for opportunities as they arise.