Treasury guidance offers wide latitude for ARPA funds

Boston Statehouse
Boston State House

Boston State House

BOSTON (SHNS) – Replenishing unemployment trust funds to pre-pandemic levels is one of a host of allowable uses for the latest round of federal relief funds, according to new U.S. Treasury guidelines.

The Treasury on Monday adopted a final interim rule outlining different ways state and local governments can use their fiscal recovery funds from the federal spending package known as the American Rescue Plan Act, and published a fact sheet offering details.

The funding objectives appear to offer wide latitude and include supporting COVID-19 response efforts, replacing lost public sector revenue, supporting economic stabilization of households and businesses, and addressing systemic public health and economic challenges.

Allowable uses include COVID-19 mitigation efforts; assistance to households for food, rent, mortgage payments or utilities; unemployment trust fund deposits; loans or grants to help small businesses and non-profits; behavioral health care services; water, broadband and sewer infrastructure investments; premium pay for essential workers, and more.

Some business groups and state lawmakers have been calling for Massachusetts to use ARPA funds to provide relief to business facing higher unemployment insurance costs because of a spike in solvency assessment rates. States and Washington, D.C. are receiving a total $195.3 billion, along with $65.1 billion for counties, $45.6 billion for metropolitan cities, and $19.5 billion for non-entitlement units of local government.

The allocation for Massachusetts is $5.286 billion. “States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the latest available data as of the date of certification will receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches,” the Treasury said.

The most recent monthly unemployment rate for Massachusetts was 6.8 percent as of March, up four points from its February 2020 level and well below its pandemic peak of 16.4 percent. –

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