Hundreds of mayors from across the U.S. pleaded for “immediate action” on billions of dollars targeted to shore up their finances and revive their communities while Congress considered a massive COVID-19 relief package earlier this year, but after they got it, local officials have been sitting on the cash instead of actually spending the windfall.
According to a review of the first financial reports recently released, a majority of large cities and states had not spent any money from the American Rescue Plan championed by Democrats and President Joe Biden, well into the summer months.
According to an independent review of the first financial reports recently released, a majority of large cities and states had not spent any money from the American Rescue Plan championed by Democrats and President Joe Biden, well into the summer.
States spent only 2.5% of their share of the $350 billion aid distribution while large cities spent 8.5%, as the nation crossed the grim milestone of 700,000 American deaths due to COVID-19.
Instead of chiding local officials about failing to expend funds intended to help people survive the crisis, Biden issued a statement urging Americans to get vaccinated.
“On this day, and every day, we remember all those we have lost to this pandemic and we pray for their loved ones left behind who are missing a piece of their soul,” said Biden. “As we do, the astonishing death toll is yet another reminder of just how important it is to get vaccinated. The vaccines are safe, free, and easy—and we have made extraordinary progress in our fight against COVID-19 over the last eight months because of the vaccines.”
“More than three-quarters of all Americans age 12 and up have now received at least one vaccine dose—including nearly 94 percent of all seniors,” said Biden. “Hundreds of thousands of families have been spared the unbearable loss that too many Americans have already endured during this pandemic.”
The Treasury Department set an aggressive reporting schedule to encourage local planning and enable public oversight. States, counties and cities with estimated populations of at least 250,000 were required to file reports by Aug. 31 detailing their spending as of the previous month as well as future plans.
More than half the states and nearly two-thirds of the roughly 90 largest cities reported no initial spending. The governments reported future plans for about 40% of their total funds.
“The American Rescue Plan is delivering direct relief to the American people, rescuing the American economy, and starting to beat the virus,” said a White House statement .
Federal officials also required localities to post the reports on a “prominent public-facing website,” such as their home page or a general coronavirus response site but many governments ignored that directive.
Officials in Jersey City, New Jersey, required journalists to file a formal open-records request to get its report, though that shouldn’t have been necessary.
Many state and local governments reported they were still working on plans for their share of the $350 billion, which can be spent on a wide array of programs.
Though Biden signed the law in March, the Treasury Department didn’t release the money and spending guidelines until May. By then, some state legislatures already had wrapped up their budget work for the next year, leaving governors with no authority to spend the new money.
Some states waited several more months to ask the federal government for their share.
Cities sometimes delayed decisions while soliciting suggestions from the public. And some government officials — still trying to figure out how to spend previous rounds of federal pandemic aid — simply didn’t see an urgent need for the additional cash.
“It’s a lot of money that’s been put out there. I think it’s a good sign that it hasn’t been frivolously spent,” Louisville Mayor Greg Fischer said. He was president of the U.S. Conference of Mayors when more than 400 mayors signed a letter urging Congress to quickly pass Biden’s plan.
The law gives states until the end of 2024 to make spending commitments and the end of 2026 to spend the money. Any money not obligated or spent by those dates must be returned to the federal government.
The Biden administration said it isn’t concerned about the early pace of the initiative.
The Government Accountability Office (GAO) in July published a report on federal pandemic relief aid detailing large sums of federal funding that remain unspent.
The GAO report estimated that more than $1 trillion in pandemic relief aid approved over the last year remained unspent at that time, including $156 billion by the Department of Health and Human Services (HHS) and another $210 billion that was allocated for state and local governments.