American Rescue Plan creates vast potential for economic development
BY MILES FRIEDMAN AND MICHELLE COE
May 14, 2021 Updated May 14, 2021
The information we have all waited for has now been released in the form of an Interim Final Rule adopted by the U.S. Treasury Department on appropriate use of the $350 billion in American Rescue Plan funding.
As expected, the allocation that eligible states, localities and tribes can access with a simple request is broad-based and flexible and contains only a handful of restrictions and prohibitions. It is intended to meet pandemic response needs and rebuild a stronger and more equitable economy as the country recovers.
Recipients can use these funds to help heal communities, impacted industries, small businesses, households, essential workers and those hardest hit by the economic crisis. Emphasis is expected to include special programs for minority firms and individuals, as well as highly impacted industries such as travel, tourism and hospitality.
Some of the allowable use examples specifically profiled by the Treasury document are clear departures from the more restrictive funding under the CARES (Coronavirus Aid, Relief, and Economic Security) Act.
Moreover, the four-year spending period also allows for more time to plan, gain community input and carefully implement programs than the much shorter period allowed under CARES. Rather than attempt to rapidly execute effective programs in a prohibitively short time frame, communities can be more strategic in the approaches they take and the way assistance is rolled out.
One concern for this type of relief funding is that the money will be spent on one-off projects that have little or no lasting impact on the future of local economies. Like the CARES Act funds, ARP allocations must be connected in some way to an eligible use of the funding allocation. However, the ruling appears to emphasize a preference to create and implement local programs that will have lasting, positive impacts on the community.
While communities should still focus on urgent relief efforts to households and businesses to support immediate economic stabilization, they should also consider ways in which their ARP funds can be utilized to help build stronger economies and to pave the way to a more prosperous, resilient future.
Miles Friedman has been an economic developer for more than 40 years and has assisted state, local and private clients in more than 30 states. Most recently, he served as director of economic Development in Fauquier County, Virginia. He is currently president of Grella Partnership Strategies, a unique collection of economic developers who are committed to helping communities strive for excellence using a creative combination of time-tested and cutting-edge strategies and technologies.
Michelle Coe heads the graphic design and business consulting firm, BlueSkyPhoenix. She is a successful entrepreneur and business counselor who guided her firm through the pandemic and assisted many clients in finding their way during the crisis. She serves as a consultant and mentor to smaller firms who aspire to utilize the internet and social media more effectively to bolster their business models, to market their products and services and to reach out to current and prospective customers. She is currently the chief operating officer of Grella Partnership Strategies.
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