Local governments are spending billions of pandemic relief funds, but some report few specifics

Local governments are administering billions of dollars in pandemic relief funds, yet some are offering minimal details regarding their spending or planned budgets. Approximately 6,300 cities and counties, which equate to nearly a quarter of all such entities across the nation, have reported no expenditures as of spring. This information comes from an analysis by Big Big News, using data from the U.S. Treasury Department. Moreover, about 5,100 of these governmental units have not listed any projects that are either in planning or already underway.

Questions arise: Is the money unnecessary? Are municipalities merely holding onto it without putting it to use?

In interviews with the Associated Press, both local and federal officials have argued that the publicly accessible data can be misleading. They point to various interpretations of reporting requirements, delays in reporting, and a failure to include preliminary planning as factors that make the data seem inconsistent. Some critics view these discrepancies as signs of an imperfect response to the pandemic.

Federal authorities have estimated that over 80% of the funds have been committed to spending, even though this may not be immediately apparent in the reporting.

An example of this complexity is Joplin, a city that plans to use its pandemic aid for numerous projects such as housing, high-speed internet, public safety equipment, and more. However, this expenditure won’t be visible in federal reports until later in the year.

In the past few years, Joplin has used pandemic aid to obtain millions in state grants and plans to reinvest in community improvements, such as down-payment assistance and repairing or demolishing old homes. The city’s finance director, Leslie Haase, anticipates that Joplin will be a better place by 2026.

The American Rescue Plan, signed by President Joe Biden in 2021, included $350 billion in flexible aid for various governmental entities. The intention was to provide immediate help during the health crisis and long-term support for communities. The allocated funds must be obligated by the end of next year and spent by 2026.

According to an analysis by the AP, as of April, more than 26,500 governments had spent 43% of their funds and had approved spending plans for 77% of the money. Accounting for delays and differing reporting methods, the actual spending commitment is likely well above 80%, said Gene Sperling, the White House American Rescue Plan coordinator.

Despite these efforts, Republicans and fiscal conservatives have questioned the necessity of such spending. Some have criticized the allocation of funds to projects they deem unwarranted.

The funds have been used for various purposes, including supporting an upscale hotel, a minor league baseball stadium, and prisons, leading to dissatisfaction among some members of Congress.

Additionally, the lack of clarity in reporting requirements has led to confusion among local governments. More than 6,000 local governments have marked their entire federal aid as “revenue replacement,” often without needing to prove the loss, as permitted by the Treasury rule.

However, some officials argue that governments should still detail how they have used the money, whether for salaries or other expenses, to maintain accountability for taxpayer funds.

No immediate penalties exist for incorrect or absent reporting, but continuous late reporting could result in corrective action or other consequences.

In some instances, governments have not reported expenses or projects yet, despite having approved plans. These projects might only be reflected in upcoming quarterly reports.

The utilization of pandemic relief funds represents a work in progress for many governments. Some have waited to finalize spending plans closer to the beginning of their fiscal years in July. Teryn Zmuda, chief economist and research officer at the National Association of Counties, emphasizes the importance of thoughtful spending, saying, “While the intent of the dollars was to respond to the pandemic, it was also to very intentionally build your community based on its specific needs.”

The information in this article has been gathered by reporters Lieb from Jefferson City, Missouri, and Harjai from Los Angeles, both working with The Big Big News/Report for America Statehouse News Initiative. Report for America is a nonprofit program that places journalists in local newsrooms to cover underreported issues.

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