How much money is flowing into Oklahoma because of the American Rescue Plan Act?
A lot, is about all anyone can say with certainty.
“We’re telling our county commissioners this is a once-in-a-generation opportunity,” said Gene Wallace, executive director of the Association of County Commissioners of Oklahoma, known as ACCO. “This is something that’s going to have far-reaching affect on their counties.”
The figure given most often is $3.2 billion. That’s how much the state ($1.9 billion) and county and local governments ($1.3 billion) have been directly allocated.
But that doesn’t include the $1.5 billion already given public schools, the billions going to the state’s tribal governments and, potentially, billions more available through grant programs and other revenue streams.
The amount is so large the state has hired two consultants to manage its share of ARPA. One of those consultants, Gatehouse, is also working with the Oklahoma Municipal League, and some individual counties and municipalities have also signed consulting contracts of one kind or another.
Unlike the CARES Act, which required state and local governments to spend their allocations quickly, ARPA funds are being received over two years and don’t have to be obligated until 2024 or spent until 2026.
Mike Fina, executive director of the OML, said the longer timeline allows for more careful planning — and for state and local governments to stash their allocations in interest-bearing accounts for awhile.
Fina said OML has helped about 60 municipalities complete applications for their allocations, and have about 60 more partially completed.
He said the application process is so simple that it can be completed on a cell phone in five to 10 minutes.
Unlike with the CARES Act, when many local governments in the state did not claim any or all of the money for which they were eligible, Fina and Wallace say they expect full or almost full ARPA participation.
“I know for a fact that (Friday) there will be 60 communities in Oklahoma with the money in their bank accounts,” said Fina. “There will be a lot more in the weeks ahead.”
But, he said, it could be awhile before citizens see the money at work.
“I don’t think we’ll see the real impact for two years,” Fina said. “For one thing, contractors are out there now buying up every piece of PVC pipe they can find. Costs are going to go up. So some are going to keep their money in accounts until things slow down a little.”
Fear of inflation has been one of the objections to ARPA and to two other multi-trillion dollar initiatives being pushed by the Biden administration. Such a huge infusion of cash is almost certain to put people to work, but all that work is likely to drive up the cost of everything from building materials and equipment to labor.
Almost $770 million is being distributed to Oklahoma’s 77 counties based on 2020 Census data. The state’s 10 municipalities with at least 50,000 people are getting $315 million, and “non-entitlement units” — local governments of less than 50,000 — are splitting $240 million to be distributed by the state.
Because the funds are one-time, state officials as well as Wallace and Fina are urging it be spent primarily on capital improvements or expenses directly related to COVID-19.
Although ARPA is considered COVID relief, the expenditure guidelines are more flexible than the CARES Act’s. The money may, for instance, be used to expand broadband, fix or replace water and sewer systems, and to bolster housing and social services in what are called disproportionately impacted populations and communities.
Among the few things it cannot be used for is to make whole underfunded government pension systems or offset revenue shortfalls not related to COVID.
“This will be some of the easiest grant money (local governments) have ever received,” said Fina, who then warned that the real problem could come later, when the money has to be accounted for.
Wallace said he expects counties’ most common uses for the money will include infrastructure, flood control and wastewater projects, communications equipment for sheriff’s offices and other first responders, and what is called “premium pay” for certain public employees whose jobs have put them at high risk for contracting COVID.
Fina, too, said he believes the premium pay category will also be popular with towns and cities.
The biggest use, though, may be addressing the water and sewer deficiencies with which many Oklahoma towns and cities are contending.
“People talk about roads and bridges, but water and wastewater are just as bad,” he said.
The state’s ARPA website, https://oklahoma.gov/arpa.html, is live and expects to soon be fully functional, with a portal to apply for funds and information on approved projects.
“I think the public is probably going to have more say” in the spending of ARPA funds than it did with CARES, Wallace said. “Those counties that got a lot of money, without a doubt you’re going to have more public involvement in the final decision. Which I think is healthy.”
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