Many cities and states have spent no American Rescue Plan funds: report

As of this summer, a majority of large cities and states had yet to use any of the funding they received as part of the Biden administration’s American Rescue Plan, according to The Associated Press.

More specifically, no initial spending was reported by over half of the states and two-thirds of the 90 largest cities, the AP said. 

After reviewing spending reports required by the law, the AP found that states had spent 2.5 percent of the funds they initially received, and large cities spent 8.5 percent of the money. 

The law was signed by President Biden in March, but some governors had already finalized their annual budgets by the time funds were released by the Treasury Department in May, the AP reported.

In city government, some delays were caused by waiting to receive public feedback on how to use the funds. Others were still figuring out how to spend aid received even earlier in the pandemic, the AP said.

“It’s a lot of money that’s been put out there,” Louisville, Ky., Mayor Greg Fischer told the AP. “I think it’s a good sign that it hasn’t been frivolously spent.”

Under the law, governments have until 2024 to make plans for how to use the money and until 2026 to spend it. After that, any remaining funds will have to be returned to the federal government. 

Gene Sperling, the White House’s American Rescue Plan coordinator, told the AP he was not concerned with the slow pace of spending. He added that the funding was intended to help with the crisis while also providing “longer-term fire power to ensure a durable and equitable recovery,” per the AP.

“The fact that you can spread your spending out is a feature, not a bug, of the program. It is by design,” he added to the AP.