U.S. Treasury Releases Guidance on ARPA

An hour ago, the U.S. Department of the Treasury (Treasury) announced the launch of the American Rescue Plan Act's Coronavirus State and Local Fiscal Recovery Funds program, which provides $350 billion in emergency funding for eligible state, local, territorial, and Tribal governments to help turn the tide on the pandemic and lay the foundation for a strong and equitable recovery.

Treasury also released the Interim Final Rule (IFR) and fact sheet for the program that sets forth eligible uses for funding, which includes responding to acute pandemic-response needs, filling revenue shortfalls, and supporting the communities and populations hardest-hit by COVID-19. Cities and villages are expected receive ARPA payments in 2021 and 2022 and will have until December 31, 2024, to spend the funds. The lengthy document provides further direction regarding many questions relating to allowable uses of the federal stimulus payments. We have reviewed the document quickly and identified the following areas to bring to your attention:

  • Services to address behavioral healthcare needs exacerbated by the pandemic,
  • Aid to unemployed workers and job training, as well as aid to households facing food, housing, or other financial insecurity which can include supporting survivor's benefits for family members of Covid-19 victims,
  • Addressing health disparities through funding for community health workers, remediation of lead hazards, and community violence intervention programs,
  • Investments in housing and neighborhoods such as affordable housing development, housing vouchers, and assistance to facilitate movement to neighborhoods with high economic opportunity,
  • Addressing education disparities including early learning services, tutoring or after-school programs, as well as new or expanded high quality childcare and hoe visitation programs and enhanced services for child welfare involved families and foster youth,
  • A method for calculating reduction in revenue. Once a shortfall is identified, recipients will have broad latitude to use funding to support government services up to the amount of lost revenue,
  • Providing premium pay to a broad range of essential workers directly or through grants to private employers,
  • Funding an array of water and sewer infrastructure including drinking water, wastewater, stormwater or subsurface drainage water and projects that address the impacts of climate change. The Interim Final Rule aligns types of eligible projects with the wide range of projects that can be supported by the EPA's Clean Water State Revolving Fund and Drinking Water State Revolving Fund.

We will continue to review the guidance and provide you with additional information via the League’s Capitol Buzz newsletter later this week. Please also join us tomorrow (May 11) at the League’s Virtual Roundtable at noon. (See "Upcoming Meetings" below.)

Wisconsin DOR Issues Guidance on ARPA's Impact on Levy Limits and Expenditure Restraint Program

Last week, the Department of Revenue released a guidance document for cities and villages providing pointers on how to avoid spending ARPA dollars in a manner that disqualifies a community from receiving payments under the Expenditure Restraint Program (ERP). DOR's guidance also discusses the potential impacts spending federal ARPA payments may have on a community's levy limit.

ARPA and ERP. DOR's guidance reminds municipal officials that if a community allocates and spends its ARPA stimulus payments within the community's general fund budget, the ARPA payments will be considered part of the community's allowable percentage increase in general budget spending under ERP. DOR's guidance confirms that you can avoid having the ARPA payments disqualify your community from ERP by using the dollars for a specific purpose and allocating and expending the dollars from a special revenue fund.

ARPA and Levy Limits. DOR's guidance also reminds local officials that if your governing body chooses to reduce the municipality's property tax levy in response to receiving ARPA federal stimulus payments your property tax levy limit will be reduced in the following year. Under the levy limit law a community's allowable base levy is the prior year's actual levy.
Read DOR's full guidance here.

The Assembly and Senate are on the Floor this Week

Both the Assembly and the Senate are meeting on the floor tomorrow afternoon.

The Senate's calendar includes the following bills of interest to municipalities:

SB-91 Hydrologic Restoration (Sen. Cowles). A general permit for hydrologic restoration projects and creating a hydrologic restoration and management advisory council. The League supports this bill.

SB-117 Oversight of Police and Fire Departments in Populous Cities (Sen. Wanggaard). Imposes new requirements on boards of police and fire commissioners and protective services departments in Madison and Milwaukee. The League opposes this bill.

SB-124 Creating a Community Policing House Grant Program for Communities over 30,000 in Population. (Sen. Wanggaard). The League supports this bill.

SB-248 Recycling (Sen. Cowles) Changes to the electronic waste recycling program and granting rule-making authority. The League supports this bill.

SB-254 Allowing waiver of interest and penalties on late 2021 property tax payments, and waiver of the timely payment requirement for filing certain property tax claims. (Sen. Feyen) The League is neutral on this bill.

The Assembly's calendar includes the following bills of interest to municipalities:

AB-51 Public notice of noncandidacy for incumbent local elected officials (Rep. Ramthun). The League supports this bill.

AB-56 Making it clear that personal property aid payments made to a TIF district transfer to the municipality and other taxing jurisdictions after the TID terminates. (Rep. Steffen). The League supports this bill.

JFC to Continue working on the state budget on Thursday

The co-chairs have not yet announced the budget topics that the committee will take up on Thursday. In the first votes this session, last week the Republican controlled Joint Finance Committee removed 384 of the proposals included in the Governor's budget. This move will require the committee to build a new budget from scratch and work of base funding levels to craft the two year spending plan.

Action Step: The League urges municipal officials to send comments to the Joint Finance Committee and your state legislators focusing on:

  • Shared Revenue
  • Local Transportation Aids
  • Payment for Municipal Services Program

  • Levy Limits

Use the state budget comment template prepared by League staff here.

Examples of State Budget comments from League members are available on our website at https://www.lwm-info.org/1630/State-Biennial-Budget and include:

The League greatly appreciates all who have participated in helping us advocate for municipalities across the state. There is still time to make your voice heard!


Adopt the Shared Revenue Resolution!
Over 60 communities have adopted the League's model shared revenue resolution. Thank you to the cities and villages that have adopted or have added the Shared Revenue Resolution to their agenda for consideration. If your municipality isn’t on the list, it is NOT TOO LATE to take action in support of long-term funding for police, fire, parks, etc. We have provided a sample resolution - League Shared Revenue Take Action Plan (Check to see if your municipality is on the list at the same link. Did we miss you? Email Gail Sumi.)