American Rescue Funds: How Michigan is Ensuring Equitable Allocations

Key Takeaways:

• The American Rescue Plan (ARP) rules are projected to be finalized in the fall.
• ARP recipients will not be penalized for allocating funds based on the interim rules.
• A top priority for ARP funds is making sure they are distributed to communities most in need.

The panel was moderated by David Egner, president and chief executive officer of the Ralph C. Wilson Jr. Foundation, and it consisted of Alize Asberry Payne, racial equity officer for Washtenaw County; Kyle Caldwell, president and chief executive officer of the Council of Michigan Foundations; and Stephan Currie, executive director of the Michigan Association of Counties.

These experts discussed the upcoming ARP funding that will be distributed across the United States “to provide direct relief to Americans, contain the COVID-19, and rescue the economy,” according to whitehouse.gov.

Through the ARP, the State of Michigan will receive more than $10 billion. Egner shared that this amount will be distributed directly in four ways: to the state, counties, municipalities, and school systems.

What’s unique about this unprecedented release of funds and its distribution method is that none of the recipients will be required to coordinate with one another about how the $10 billion is spent. The rules for how the money can be spent are also not finalized.

While recipients will not be penalized for spending the money based on the interim rules, Currie recommends they act cautiously with how they allocate and spend it until the rules are finalized later this fall.

“We’ve been counseling folks to be pragmatic, to be slow with these funds. You have three years to allocate them, five years to spend them,” Currie said.

Recipients are also encouraged to only spend the funds on one-time capital investments—nothing that requires an ongoing investment.

Because there are so many questions currently unanswered and to help recipients along the process, the Michigan Association of Counties has pre-qualified four vendors to help with ARP funding, whether it’s reporting or getting a red-light/green-light. The vendors have prior experience with assisting Michigan counties with CARES Act funding.

Another important element of ARP funding discussed was how recipients will ensure their allocation decisions are equitable and directly impacted by communities who have been affected by COVID-19.

“I think starting from a place of, who are the people who are usually at the decision-making table, and if they’re the only people in the room, you don’t have a diverse enough perspective. And so, really reaching into the communities that have historically been underrepresented, and from the day that we know, have been disproportionately impacted,” said Payne.

Caldwell believes recipients getting to know and work with partners in different sectors who know their members well is an excellent opportunity to bring the community’s needs into sharper focus. He also recommends working with the business community to create thoughtful conversations and make sure that decisions are informed by the constituents that each community wants to positively affect.

Individuals can also reach out to their county commissioners to influence what happens locally.

“The beauty of these funds are that they are at the local level. You see these folks at coffee shops, so in your communities, you can go talk to them. You can be a lobbyist,” Currie said.

This session was hosted by the Ralph C. Wilson, Jr. Foundation.