State and local governments have a Dec. 31 deadline to obligate dollars they received from the pandemic’s State and Local Fiscal Recovery Fund, Governing reports.
Any money unobligated past New Year’s Eve must be returned to the Department of the Treasury. Governments have until 2026 to spend the cash.
Altogether, some $350 billion was disbursed through the fund, which was established under the 2021 American Rescue Plan Act to support pandemic response and recovery efforts.
An analysis released last fall by the Government Accountability Office shows that state and local governments had spent 60% of their awards through the first quarter of the year.
Governments are greenlit to use the funds on replacing lost public sector revenue; public health services; public sector workforce investment; emergency relief; and water, sewer and broadband infrastructure.
As of March, 45% of spending from the recovery dollars had been for revenue replacement and almost 40% to address negative economic impacts on small businesses, industry, nonprofits and households. More than 10% of local governments serving populations under 50,000 had not obligated or spent any of their recovery awards, according to the Government Accountability Office.
