NCLM Southern City Volume 71, Issue 3, 2021

American Rescue Plan “I’ve been in public service a long time. I’ve never seen this much available funding that can be invested in our communities for transformational change.” Governor Roy Cooper Alexander wrote. ”Our message, however, is the opposite. We urge patience and prudence.” The level of uncertainty on how to proceed is understandable. This is new terri- tory. Despite the steady flow of federal resources and aid during the COVID-19 pandemic, the ARP marks the first time that cities and towns will receive support directly. It is intended for recovery. It is also intended for transformational, genera- tional local investment. So, how will it be used? How should it be used? Background It’s important to remember how this all came about. Since March 2020, cities and towns across North Carolina have dealt with a financial crisis caused by no action of their own, but rather by a deadly, global pandemic. Health measures, lockdowns, an inability to gather—these consequences of COVID-19 produced an economic fallout that has impacted all areas of our state. Thread through every cancelled event and empty street is a story of financial hard- ship, for residents, business owners, and local governments alike. Cities’ and towns’ coffers rely heavily on sales tax and occupancy tax—two reve- nue sources that were hit the hardest by the pandemic. As health precautions and rising unemployment hindered normal economic activity, less money changed hands, and less sales tax was collected; travel and tourism severely diminished, and less occupancy tax was collected. This revenue is not excess. It is critical, and used to provide the key public services that our residents rely on: public safety, infrastructure, water, and more. As our citizens struggled through the pandemic, our municipalities suffered as a result. And as our municipalities suffered, our citizens were harmed even more. ARP is designed to promote recovery through investment. As such, it’s a rare opportunity for North Carolina. Where can the money be spent? When referring to the “American Rescue Plan,” the circles of local government are most often referring to the direct funding to cities and towns, known formally as the Coronavirus State and Local Fiscal Recovery Funds. In North Carolina, this totals $5.2 billion for the state, $2 billion for the counties, and $1.3 billion for the municipalities. It is not simply do-as-you-wish funding. First and foremost, it is relief—to local budgets, to essential workers, and to the ongoing COVID-19 situation. That inten- tion is expressed through the law’s four allowable expense categories for local continues on page 30 29 NCLM.ORG Photo credits: City of Goldsboro