Sarah Hudacek, Coalition Manager, Advocates for Ohio's Future contributed to this article.
The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021, and provided $1.9 trillion in economic stimulus across the country to help speed the nation’s recovery from the health and economic effects of the COVID-19 pandemic. Ohio received $5.4 billion in Coronavirus State Fiscal Recovery Funds (SFRF) with another $5.3 billion designated for municipalities, townships, and counties.
The legislation allowed for SFRF funding to be used in a flexible manner as long as it addressed one of the following:
- Replace lost public sector revenue
- Respond to the far-reaching public health and negative economic impacts of the pandemic
- Provide premium pay for essential workers
- Invest in water, sewers, and broadband infrastructure
- Provide emergency relief from natural disasters or their negative economic impacts.
- Support surface transportation projects, utilizing funds for eligible projects through three pathways
- Support Title I projects that are eligible activities under the Community Development Block Grant and Indian Community Development Block Grant programs
The legislation and administrative rules established for implementation require these flexible funds to be obligated by December 31, 2024, and spent by December 31, 2026. The combination of providing 5 years for the funding to be spent and flexible allowable uses illustrates that ARPA was intended to address the economic ripple effects of the pandemic, not just provide immediate relief.
CARES Act versus ARPA
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Coronavirus Relief Fund (CRF) it created was created to provide immediate relief to states and local governments. The CARES Act, which was signed into law on March 27, 2020, provided $150 billion through the Coronavirus Relief Fund to allow states and local governments to respond to the impact of the COVID-19 outbreak.
This rapid response funding was required to be spent on necessary unexpected expenditures as the result of the public health emergency that were incurred between March 1, 2020, and December 31, 2022. The short timeline for spending plus the requirement that funding be spent on needs directly associated with the public health emergency illustrates that this funding was to be used as a budgetary lifeline during the turbulent times of COVID-19.
While ARPA infused federal funds into dozens of new and existing funding streams, by far the most watched ARPA stream was the State and Local Fiscal Recovery Funds, the most flexible pot of funds. There were many other specific use funds. For example:
- Older Americans Act funding
- Child Care Stabilization funds
- Elementary and Secondary School Emergency Relief Fund
- Higher Education Emergency Relief Fund
- Emergency Rental Assistance
In contrast with SFRF, each of these other funds had spending guardrails set by the federal government and existing law, with little room for discretion at the state and local levels.
Ohio’s use of State Fiscal Recovery Funds
Because of their flexibility, State Fiscal Recovery Funds presented the biggest opportunity for citizens, advocates, and stakeholders to share their community’s needs with elected officials, and for officials to use their discretion to appropriate dollars accordingly. How a state used its SFRF funds shows how responsive it was to the recovery needs faced by the state in the wake of the pandemic.
By July 2023, Ohio had fully appropriated the full $5.4 billion SFRF allocation. These appropriations can be sorted into the following categories:
Ohio’s investments in health and human services such as housing, food assistance, education, public health, health care, and behavioral health were overall less than funds appropriated to other uses, such as business recovery, tourism, unemployment compensation, infrastructure, community development, public safety, and parks.
Throughout the time ARPA funds were available, health and human services advocates sought $308 million for affordable housing, $183 million for food assistance, $500 million for lead poisoning prevention, and more. By and large, elected officials did not award SFRF funds, or did not award the full amount, to the investments requested by advocates.
SFRF appropriations were initiated by both the legislature and the Governor’s office. Some of the Governor’s initiatives included repaying the federal government for a nearly $1.5 billion pandemic unemployment compensation loan, creating a $500 million grant program for Appalachian community development, and investing $84 million in pediatric behavioral health access and capacity.
ARPA and the State Budget
To examine the experience of ARPA in Ohio from a budget perspective, three different metrics will be used.
- Opportunities for public input
- Responsible budgeting
- Meeting deadlines
When examining opportunities for public input, it is imperative to examine the timeline of when ARPA funds were received. Ohio received its first ARPA Coronavirus State and Local Fiscal Recovery funds payment in May of 2021, right in the middle of Ohio’s budget process. By that point, many of the legislative subcommittee and committee hearings had already taken place, making public participation challenging.
During the next state budget process in 2023, only $450 million remained to be obligated. What happened during the interim?
Ohio obligated most of its ARPA funding outside of the state budget process through a handful of different bills and by the Controlling Board.1 In theory, funding appropriated through the legislative process should provide numerous opportunities for the public to share input on how ARPA dollars should be spent by providing testimony at public hearings or by meeting with or contacting committee members.
However, ARPA appropriations were often added to legislation late in the legislative process or included in bills that weren't highlighted as ARPA spending bills, making it more challenging for Ohioans to engage on what was often fast-moving legislation. Funding approved through the Controlling Board is a different story. Individuals cannot provide public testimony at Controlling Board meetings, which limits the ability for public input to be considered.
Did Ohio appropriately budget its ARPA funds?
To see if the state of Ohio budgeted this funding responsibly, the final appropriations must be reviewed. Ohio’s $5.4 billion is divided into 18 different categories, seen in the table above. When looking into the details of the specific awards within the different categories, it can seem that funding is primarily going towards one-time expenses. The best practice for one-time money, especially at this scale, is to spend it on one-time expenses. Doing so helps ensure a budgetary issue in the future is not created.
The state of Ohio has appropriated the entirety of the $5.4 billion received from ARPA and as of July 2024, more than 87 percent of the funds are obligated. The state has until December 31, 2024, to obligate all the funding. The state’s annual report on its recovery plan for the funding received through ARPA illustrates that as of July 2024, over $3.2 billion or approximately 60 percent of the allotment has been spent.
Ohio has until December 31, 2026, to spend its funds. Overall, Ohio is in a good position to meet both deadlines.
State funds hits and misses: reduced inequities and lack of transparency
Unlike many other states and local governments, Ohio did not engage in a comprehensive upfront planning process before beginning to appropriate ARPA funds. Looking back, a planning process that incorporated feedback from constituents and advocates could have addressed both the emergent pandemic needs of the state and long-term recovery needs, released funds to communities quicker, and led to a comprehensive, transformative, well-rounded recovery plan for the state.
Notably, the state also did not have a publicly available resource to keep track of these appropriations as they were made. Advocates for Ohio’s Future and Ohio Poverty Law Center began publicly tracking the state’s use of ARPA funds in August 2022 to make this data more easily available to the public. Bottom line, it would have been incredibly time consuming for Ohioans interested in how the state used ARPA funds to find the information all in one place, especially if this wasn’t part of their job. With this lack of transparency, public engagement on SFRF appropriations was even more challenging for Ohioans.
Within these investments, there were positive impacts on reducing poverty, inequities and disparities.
- Water and sewer funding connected some rural Ohioans with drinking water for the first time.
- Ohio infused $77.5 million from the ARPA Capital Projects Fund into the Ohio Residential Broadband Expansion Grant Program, funding internet service providers to expand into unserved and underserved areas of Ohio.
Among the successes in reducing disparities were also missed opportunities, and it’s important to note that there were no noticeable targeted funds to address racial or ethnic inequities and disparities in the wake of the pandemic, which disproportionately impacted people of color, or to reduce poverty amongst Ohioans of color.
ARPA will not be the last investment of its kind
The importance of the federal government deciding to provide funding in situations like this cannot be understated. The federal government has the deepest pockets out of any level of government and can provide funding levels that can truly make a difference. It is imperative during both normal and turbulent times that funding continues to be invested in health and human service activities as they are the building blocks of promoting public health and supporting human wealth.
Ohio appropriated $55 million to food assistance, which included $40 million to the Ohio Association of Foodbanks, $10 million to the Greater Cleveland Foodbank, and $5 million to the Children’s Hunger Alliance. This funding provided much needed support to people across the state.
The funding to the Ohio Association of Foodbanks provided 26 million pounds of food and hygiene products between October 2022 and April 2024, the Greater Cleveland Foodbank renovated one of its food distribution centers into a Community Resource Center and purchased over 1 million pounds of food between July 2023 and June 2024, and the Children’s Hunger Alliance purchased 3.7 million pounds of food and paid for 10,995 hours of staff time between May 2023 and June 2024.
While ARPA funds helped food assistance programs manage the increased need during the COVID-19 pandemic, it is imperative to remember that the funding received did not cover the entirety of the need identified by the Ohio Association of Foodbanks. For example, the Ohio Association of Foodbanks requested $183 million, but only received $40 million.
The American Rescue Plan Act is the most recent example of a large-scale federal investment in state and local government, but it was not the first and it surely will not be the last. The New Deal programs of the 1930s, and the American Recovery and Reinvestment Act of 2009 all came before and it is safe to say that another will come again. As a state we learned from our mistakes from the Tobacco Master Settlement Agreement of 1998 and ensured that we did not repeat our errors with the Opioid Master Settlement Agreement. The same approach must be taken from the ARPA experience to ensure that we are prepared for the next influx of money.
Advocates for Ohio’s Future and The Center for Community Solutions are committed to ensuring that public dollars go towards helping the public’s greatest needs, advocating for a transparent appropriations process, and asking Ohio to engage in a comprehensive planning process prior to spending large-scale one-time federal funding.
