Gov. Brad Little was upfront with his condemnation of the new American Rescue Plan Act federal stimulus funding but also didn’t turn down the money.
ARPA allocates $1.89 billion of “fiscal recovery” funding plus $126 million for capital projects. An additional $347 million is allocated directly to counties and $229 million to cities. Another $981 million was allocated for direct programs ranging from K-12 to child care grants.
“I have plenty of concerns about the $1.9 trillion American Rescue Plan Act at this stage of the pandemic,” Little stated during his March 18 press conference. “The massive price tag of a plan is irresponsible, especially when $46 billion of CARES Act funding from last year remains to be spent. And the Congressional Budget Office projects a stronger economy in 2021 without additional stimulus. This plan is being mortgaged on our children and grandchildren’s future. They will shoulder the burden to pay off this massive debt.”
Little added: “All that (being) said, rejecting the funds is not the right thing to do for Idaho. Rejecting the funds would mean California, New York, Illinois and other big states would get to spend Idahoans’ tax dollars. Rejecting the funds would mean Idaho gives up our say on how our allocated share gets spent. That is unacceptable. Therefore Idaho will accept the money for our state.”
Little has strong words about how he believes Idaho has been penalized for its strong economic recovery and low unemployment. This is based on the federal formula for allocating the ARPA funds which was based on both population and unemployment rate. “(The federal allocation) rewards bad behavior (by states) and disincentivizes good behavior,” Little remarked.
While the new funds can be spread over four years, some education funds must be spent immediately. “Some of the direct funds to agencies, mostly for K-12 public education, are legally required to be allocated within 30 to 60 days,” Little explained. “We cannot wait until the next legislative session to direct these funds to our public schools. Therefore I’ve been actively working with legislators on a plan for them to take the required actions before adjournment, while setting up a process to make long range investments with the remaining funds.”
The ARPA funds come with some limitations on how they can be spent. While there are many similarities with the CARES Act limitations, the ARPA money adds three additional categories for where the money can be used: premium pay programs for essential workers, to cover reductions in tax revenues and infrastructure. Tax revenue funding doesn’t help Idaho because the state saw record tax revenue increases, not reductions. Infrastructure spending applies to water, sewer and broadband, but not transportation. Transportation was excluded, according to Little, because the Biden administration will be pushing to fund transportation infrastructure in a separate bill initiative.
Alex Adams, administrator of the Idaho Division of Financial Management, clarified after the press conference that Idaho’s independent taxing districts were not included directly for any funding under ARPA. “Cities and counties should work to with the independent taxing districts to address sharing of APRA funds.”