State and local governments are scrambling to ensure they don’t lose any of the federal funds they received through the State and Local Fiscal Recovery Fund. They have a Dec. 31 deadline to obligate these dollars; anything unobligated at that time must be returned to the U.S. Department of the Treasury.
Texas had obligated 98 percent of funding by March 31 and spent about 73 percent, according to the Government Accountability Office (GAO).
The analysis by the GAO, based on reports through the first quarter of that year, found that state and local governments had each spent 60 percent of their awards. State entities had obligated a slightly larger share (84 percent) than local (76 percent).
All told, $350 billion was disbursed through the fund. The program was established under the 2021 American Rescue Plan Act (ARPA) to support pandemic response and recovery efforts.
The Texas Legislative Budget Board is tasked with tracking and reporting the ARPA funding. One of its May reports shows how state agencies and institutes of higher education had used or obligated funding.
The information is self-reported and may not be a full accounting, according to the office.
Governments have until 2026 to spend their awards, but only those funds that have been obligated by the end of this year. Eligible uses include replacing lost public-sector revenue, public health services, public-sector workforce investments, emergency relief and water, sewer and broadband infrastructure.
*A version of this story originally appeared in Governing, a sister publication of Industry Insider — Texas. Both are owned by e.Republic.
Time Is Running Out for State and Local Governments to Protect Pandemic Funds
Texas has obligated at least 98 percent of its funding, but state and local governments will be forced to return pandemic relief funds if not properly obligated by the end of December.
Shutterstock/Sergii Gnatiuk
