Local governments turn away $73M of federal pandemic aid
JEFFERSON CITY, MO. » From small towns to big cities, every government across the U.S. was offered a slice of $350 billion in federal coronavirus relief funds to help shore up their finances, cover pandemic-related costs and invest in community projects.
Officials in 1,468 local governments effectively said “no,” turning away a potential total of $73 million, according to an Associated Press analysis of data compiled from every state. The declined money ranged from $177 for the one-person village of Monowi, Nebraska, to $3.9 million for DeWitt County, Texas, population about 20,000.
The city of West Alton, Missouri — a community of more than 500 at the confluence of the Mississippi and Missouri rivers — turned down a potential $106,341 in federal aid. Though the rejected amount was almost half the size of the city’s budget, there wasn’t much discussion about accepting it during a city council meeting.
“The conversation probably lasted 15 seconds. Without having really any need for it, it wasn’t something we felt like we wanted to get in the middle of,” Mayor Willie Richter said.
Other small-town mayors and village administrators provided a variety of reasons for rejecting the federal money. Some thought they had no eligible uses for it. Others didn’t want the hassle of dealing with the federal bureaucracy, or were politically opposed to the financial aid approved last year by the Democratic-led Congress and President Joe Biden.
The AP’s analysis identified 1,460 small cities, towns, villages or townships that declined a potential allocation of $61 million. That amounts to about 5% of the nation’s roughly 28,000 small local governments, but just 0.3% of the total dollars allotted for those entities. Eight counties also have forgone a total of $12 million. No states or territories declined funds.
The U.S. Treasury Department said it was pleased with the overall response to the American Rescue Plan, which marked the first time it had distributed money to such a broad swath of governments across the U.S.
The program “was born out of an understanding that the economic effect of the crisis was being felt by jurisdictions of all sizes,” said Jacob Leibenluft, the Treasury’s chief recovery officer. He added: “The vast, vast, vast majority of recipients saw a need to use these funds.”
The pandemic relief money began flowing to governments one year ago.
Data released by the Treasury show that, as of the end of 2021, a total of 1,756 states, territories and larger cities and counties had budgeted about $106 billion of the initial $208 billion they received. That money helped expand high-speed internet, assist residents with housing costs, provide aid to small businesses, shore up depleted unemployment funds and pay for public health initiatives and government services, among other things.
The Treasury hasn’t released data yet on how smaller governments used the money.
A second payment for local governments could come from the Treasury as soon as this month. But smaller governments that rejected the initial payment aren’t eligible for the second round — a source of regret among at least some local officials.