This August marks 17 months since the passage of the federal stimulus package, the American Rescue Plan Act (ARPA). During this time, states throughout the US spent billions of dollars and implemented many successful programs. Let’s take a closer look at how ARPA funds have been allocated and spent in Montana.
ARPA aimed to provide direct relief to individuals and support communities affected by the COVID-19 pandemic. In comparison to the CARES Act, which focused primarily on immediate relief, ARPA’s focus combines this with long-term investments.
ARPA legislation allocated over $2 billion to Montana for use at the state and municipal levels. Since its passage occurred when the Montana Legislature was in session, legislators were already convened to discuss the implementation of ARPA funds in the state. House Bill 632, passed in April 2021, provided structure on spending ARPA funds in Montana and created four commissions to oversee this spending. For an in-depth analysis of HB 632, see our fact sheet from May 10, 2021.
As of August 2, the Montana ARPA dashboard shows $686.3 million have been awarded across the state supporting individuals with housing, food security, and employment and companies to build community water and sewer infrastructure
One important program, Emergency Rental Assistance (ERA 2), started awarding funds from the available $60.8 million in April 2022. Within four months, $21 million was spent supporting renters. Rapid disbursement of funds will allow the Treasury to release the remaining $91.6 million in ERA 2 funding more quickly due to Montana’s demonstrated need.
Another highly successful program was the Summer Pandemic Electronic Benefit Transfer (EBT) program. Summer P-EBT provides money for eligible families to purchase food during the summer months when schools are not in session. Over 66,000 school-age children across Montana each received $375 in August 2021, totaling $25 million invested in child food security. As a result, the program was renewed for summer 2022 and expanded to include eligible children under the age of 6.
Messaging from officials frames ARPA as long-term investment funding to support state and local economies. Each program has its own individual deadline, with the majority occurring by 2026.
Several programs’ use deadlines occurred in 2021 or will occur in 2022. Three programs with over $30 million in ARPA funds had a deadline in 2021. Montana spent 84 percent of these funds before the deadline. But, as of August 2, Montana is not on track to meet that level of spending success this year. Of the almost $272 million with use deadlines in 2022, only 30 percent of the funds have been spent.
Multiple factors contribute to the delay in ARPA spending. Montana officials cite the use deadlines and the immensity of some of these projects. Several programs, like water and infrastructure projects, are paid out only after an approved user submits reimbursement. Or take the Housing Choice Voucher Program. While Montana has almost 109 vouchers available, even when an individual or family receives a voucher, no money can be paid until a property to rent is found by the tenant, the landlord has approved them, and a lease is signed.
For many funding streams, there are still unanswered questions for a delay in releasing funds to communities or programs that need support now. There is $42 million available for COVID-19 response, like contact tracing in schools or testing resources for homeless populations. Most of these funds have a use deadline of 2022 and only 18 percent are spent. DPHHS has $12.8 million allocated for immunizations. Of that, $5 million has been awarded to county and Tribal health departments to support their COVID-19 vaccine related efforts, such as local outreach, hiring staff, and creating vaccine clinics. Yet current reports show spending at only $307k statewide
To recap, over $2 billion of ARPA funds is allocated to Montana for programs across the state. As of August 2, only $686 million in funds were awarded, and only $271 million have been spent. In the context of the spending deadlines, Montana has time to spend down remaining funds. But in the context of community needs across the state, we can and should award and spend funds more quickly.
For projects like broadband expansion, which will significantly impact Indian Country and rural areas, the commission spent months building a structure and scoring matrix for applications. Tentative awardees have only now been finalized and released. As the new school year approaches, the need for broadband remains high. Yet the timeline for project funding continues to be extended.
Montana presents unique barriers to spending on certain programs. While the Treasury released guidance on using ARPA funds, we have seen some flexibility with expenditures in Montana, which include reallocation of funds from the state to Tribal entities or moving funds between different (but related) state programs.
The effects of the COVID-19 pandemic still impact our communities. Montana needs to fast-track funds for programs that provide immediate relief and consider all possibilities of reallocating funds to social safety net programs that work in the state.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.