Months after Congress set aside hundreds of billions of dollars to help state and local governments fill budget holes created by the pandemic, some have used the money to fund a wide range of initiatives that arguably have little to do with the original intent of the relief.
From green jobs programs to tax relief, the final destinations of the funds seem to validate the concerns some lawmakers expressed while President Joe Biden’s American Rescue Plan worked its way through Congress: that state and local governments simply did not need the amount of emergency assistance that the legislation provided.
The massive American Rescue Plan included $350 billion for state and local governments to help with the recovery from the economic impacts of the pandemic-era lockdowns. Jurisdictions that received the money had “substantial flexibility,” according to Treasury Department guidelines, to spend the money how their leaders wanted.
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Even some centrist Democrats had expressed skepticism earlier this year about the size of the no-strings-attached aid to state and local governments.
For example, Sen. Angus King, who caucuses with Democrats, expressed concerns in February that some jurisdictions controlled by Republicans could use the aid to lower taxes.
Sen. Joe Manchin said in February that the $350 billion in state and local relief sought by Democrats was “extremely high” and suggested the final figure should be smaller.
Republicans had pushed to divert the state and local relief funds elsewhere, claiming many jurisdictions didn’t need anywhere near that level of support.
One reason experts have cited for the better-than-expected performance of state and local budgets heading into this year is that lockdowns and the shuttering of service industry businesses affected lower-income people far more than those with a higher income.
The pandemic, therefore, eroded state and local tax bases far less significantly than economists initially feared, when the impact of lockdowns remained relatively unknown.
The chief economist at Moody’s Analytics, an economic research firm cited regularly by Biden and his aides, said earlier this year that state and local budget shortfalls were projected to be roughly $60 billion through 2022 — hundreds of billions of dollars less than what Democrats pushed to secure.
Some Republican recipients of the massive aid bill did indeed provide tax relief with the money.
The GOP-controlled Texas Legislature voted in the fall to advance proposals that would use $3 billion of its American Rescue Plan funding to cut checks for homeowners in an effort to offer property tax relief.
Arizona Republican Gov. Doug Ducey put $163 million of the money the state government received toward an education program that made grants available only to schools that pledged not to shut their doors or implement mask mandates through the rest of the school year.
Blue and red jurisdictions alike spent relief funds on projects the respective parties wanted long before coronavirus began to spread.
In Austin, Texas, a Democratic-controlled city, leaders set aside $7.5 million of the city’s relief funds on childcare programs — a liberal wish list item Democrats want to expand on the national level in Biden’s latest legislative pursuit, the Build Back Better Act.
Los Angeles used $12.5 million of its relief money to provide legal representation to immigrants and to give them financial assistance, among other benefits.
Boston spent $8 million on a pilot program that provides free bus services along certain routes in the city.
Boston leaders also invested in a tourism program called “All Inclusive Boston,” a public relations campaign that created content that “highlights the local attractions and eclectic neighborhood offerings across the city” and diversity in the industry.
Officials put another $3 million from the American Rescue Plan into a “youth green jobs” program focused on climate change projects
Chicago set aside $10 million of its relief funding for a “food equity” program that includes an “urban agriculture initiative” and is designed to bring healthy foods into different communities.
Chicago’s leaders also proposed to use $9 million of its relief funding for an “environmental justice” program.
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Some cities have used their relief funds on liberal criminal justice reforms, despite a recent nationwide rise in violence.
Los Angeles, for example, put more than $47 million of its COVID-19 relief money into a program called “Care First, Jails Last” that aims to put fewer people behind bars by focusing on alternatives to incarceration and “racial justice.”
Chicago moved to put $85 million of its American Rescue Plan funding into several social “violence prevention” programs outside of the scope of law enforcement, including a marketing program aimed at encouraging less violence.
