ARPA is NOT the same as Shared Revenue

If you’re a local leader, you are undoubtedly hearing all of these “voices” in your head:

“Don’t spend ARPA dollars on ongoing expenses. It’s not a replacement for property taxes, shared revenues or transportation aids. Think “one-time” money. Take your time. Gather ideas from a range of sources. Pay particular attention to the quieter parts of your community, those areas or residents who may have critical needs, but are unlikely to show up at the municipal podium. Keep good records.”

Cities, villages, towns, counties and the state itself are wrestling with how they can–and how they should–spend the unbudgeted $5.711 billion coming their way as a result of the American Rescue Plan Act (ARPA). The U.S. Treasury Department is scheduled to announce the rules for the program soon, and the dollars will begin arriving shortly thereafter. You have until the end of 2024 to spend your allocation. Perhaps the best thing to do with 2021 is to spend it doing careful planning.

While you’re planning for this short term shot of resources, take the time to speak up for your long-term needs. The state Legislature is putting together the state’s two-year budget, including deciding whether to increase long-neglected shared revenues. This billion-dollar budget item is a significant part of the state budget, but over the last 30 years it has lost ground, a lot of ground, to inflation, education, prisons and Medicaid. Since the 1970s, those four have taken ever-larger shares of the state general fund while police, fire, ems and other local services have received less. Make this the year that local services get their due.

The League is calling on its members to talk to lawmakers about shared revenue. Make a phone call, pass a resolution, give lawmakers a tour of your favorite local potholes. Spread the word: local government matters; it’s time for an increase in shared revenue.

Legislators have a job very similar to your own. They have more needs than resources, so they do their best to make the dollars go as far as they can. Your job is to help them understand where police, EMS and snow plow drivers fit into that priority scheme.

So, when it comes to finances, you have to have your eyes on the present and on the future. How you will allocate the valuable, one-time ARPA resources matters a lot right now. How the Legislature will treat shared revenues matters a lot next year and every year thereafter.  And your job is to balance both.