State and local governments have less than a year to decide how to spend their remaining COVID relief funds. Here’s how 26 cities are doing.

By Amanda Kass and Philip Rocco

With the passage of the American Rescue Plan Act in 2021, Congress authorized $350 billion in aid to state, territorial, local, and Tribal governments across the country under State and Local Fiscal Recovery Funds (SLFRF) program. The creation of SLFRF, which aimed to support governments’ recovery from the health and economic crises emerging from COVID-19, represented the largest transfer of flexible federal aid to subnational governments in half a century. Yet the clock is winding down on governments’ ability to spend this one-time money. So where are they now? 

Time is Running Out for Governments to Spending SLFRF Aid

Under SLFRF, as we have discussed before on this blog, Congress gave recipient governments a great degree of flexibility in how they spend their funding. Despite this flexibility, Congress also established a firm sunset on when governments can spend this money. The law gives recipient governments until December 31, 2026 to spend all their SLFRF aid. That’s a little under two years away. Even so, all the money must be obligated by the end of calendar year 2024—less than a year from now. “Obligated” means the money has been dedicated to a specific purpose, but the money just hasn’t left the bank account yet. For example, if a government places an order to buy new computers the contract creates an obligation, but the company selling the computers may not receive the money until the government receives the computers.

So, are recipient governments on track to obligate and spend their SLFRF aid by the statutory deadline? 

To answer this question, we analyzed the pace of spending in our 26 study cities (see our previous blogs on the 26 cities for more background). Our analysis is based on quarterly Project & Expenditure Reports data released by the Treasury Department. The newest data, released in January of 2024, covers spending that has taken place between 2021 and September 30, 2023. To evaluate cities’ spending pace, we compared the amounts that have been spent and have been obligated to planned spending for our 26 study cities.

Have Cities Adopted Spending Plans for All Their SLFRF Aid?

In total, our 26 study cities were awarded $11.2 billion in SLFRF aid and as of September 30, 2023, they had approved spending plans for 89% of that aid. On average, our cities adopted budgets for 90% of their SLFRF allocation. However, there is variation between governments. As the table below shows, ten of our study cities have spending plans for 100% of their aid, while five cities have approved spending plans for between 55% and 75% of their total aid.  

City	SLFRF Allocation	Adopted Budget (as of 9/30/2023)	Adopted Budget as Share of SLFRF Allocation
Albuquerque	$108,810,857	$94,898,000	87.2%
Atlanta	$170,928,821	$93,928,824	55.0%
Austin	$188,482,478	$188,482,480	100.0%
Baltimore	$641,170,126	$476,554,080	74.3%
Baton Rouge	$165,443,198	$165,443,200	100.0%
Boston	$580,329,118	$551,700,032	95.1%
Buffalo	$331,356,932	$319,942,496	96.6%
Charlotte	$141,618,325	$100,504,432	71.0%
Chicago	$1,886,591,388	$1,886,591,360	100.0%
Denver	$308,048,870	$308,048,864	100.0%
Detroit	$826,675,290	$586,319,360	70.9%
Jersey City	$139,971,935	$139,971,936	100.0%
Los Angeles	$1,278,900,928	$1,269,965,824	99.3%
Memphis	$161,061,490	$161,061,488	100.0%
Milwaukee	$394,226,649	$296,799,104	75.3%
Minneapolis	$271,192,484	$271,192,480	100.0%
Newark	$176,667,606	$167,406,944	94.8%
Oakland	$188,081,700	$188,081,696	100.0%
Philadelphia	$1,395,292,684	$975,820,032	69.9%
Phoenix	$396,080,366	$361,884,480	91.4%
Pittsburgh	$335,070,222	$335,070,208	100.0%
Portland	$207,895,373	$204,245,376	98.2%
St. Louis	$498,076,054	$498,076,032	100.0%
St. Paul	$166,641,623	$164,971,616	99.0%
Stockton	$78,052,072	$63,914,568	81.9%
Toledo	$180,948,591	$147,265,232	81.4%
Total	$11,217,615,180	$10,018,140,144	89.3%

Governments that have not approved spending plans for all their SLFRF aid will need to do so shortly because all aid must be obligated by December 31, 2024, and fully spent by the end of 2026.

How Quickly Are Governments Spending Aid?

To examine the pace at which governments are spending their SLFRF aid we calculated a “spend rate” which is the percent of planned spending that has taken place. As of September 30, 2023, our 26 study cities have spent $5.9 billion of their SLFRF aid, which is 59.2% of their planned spending. Spend rates vary significantly with St. Louis reporting it has spent just 17% approved spending thus far, while several cities (Jersey City and Oakland) have spent all their aid. The median spend rate is 54.2%.

City	Adopted Budget (as of 9/30/2023)	Expenditures (as of 9/30/2023)	Spend Rate (Expenditures/Adopted Budget)
Albuquerque	$94,898,000	$88,871,736	93.6%
Atlanta	$93,928,824	$55,259,840	58.8%
Austin	$188,482,480	$68,800,456	36.5%
Baltimore	$476,554,080	$135,432,896	28.4%
Baton Rouge	$165,443,200	$67,944,200	41.1%
Boston	$551,700,032	$248,091,520	45.0%
Buffalo	$319,942,496	$133,295,800	41.7%
Charlotte	$100,504,432	$53,662,056	53.4%
Chicago	$1,886,591,360	$1,295,388,032	68.7%
Denver	$308,048,864	$119,543,160	38.8%
Detroit	$586,319,360	$130,319,232	22.2%
Jersey City	$139,971,936	$139,971,936	100.0%
Los Angeles	$1,269,965,824	$1,182,215,552	93.1%
Memphis	$161,061,488	$115,131,456	71.5%
Milwaukee	$296,799,104	$163,490,272	55.1%
Minneapolis	$271,192,480	$165,776,880	61.1%
Newark	$167,406,944	$144,980,928	86.6%
Oakland	$188,081,696	$188,081,696	100.0%
Philadelphia	$975,820,032	$682,705,024	70.0%
Phoenix	$361,884,480	$203,614,512	56.3%
Pittsburgh	$335,070,208	$174,275,280	52.0%
Portland	$204,245,376	$119,744,128	58.6%
St. Louis	$498,076,032	$84,473,160	17.0%
St. Paul	$164,971,616	$71,397,720	43.3%
Stockton	$63,914,568	$27,177,550	42.5%
Toledo	$147,265,232	$71,034,888	48.2%
Total	$10,018,140,144	$5,930,679,910	59.2%

Spend Rates by Spending Category

As part of the SLFRF program, governments must report their spending to the Treasury Department at the “project-level” and every project must be assigned to a spending group. There are currently 10 groups. In the table below we list each group, the number of projects our 26 cities have in each group, and the adopted budget per group.

Group	# Projects	Adopted Budget (as of September 30, 2023)
1: Public Health	214	$678,802,626
2: Negative Economic Impacts	743	$2,956,957,602
3: Public Sector Capacity	64	$112,378,089
4: Premium Pay	13	$94,139,756
5: Infrastructure	28	$167,481,532
6: Revenue Replacement	295	$5,846,536,296
7: Administrative	49	$161,844,161
8: Natural Disasters	0	$0
9: Surface Transportation	0	$0
10: Title I Projects	0	$0

Importantly, our data suggest that the pace of spending is tied to how governments are using the funding. For example, some projects are one-time expenses (like one-time premium pay for essential public health workers) while others are multiyear (like a community violence intervention program or replacing lead water service lines). New initiatives and programs may have slower paces of spending than using SLFRF aid for existing programs and services because of the time needed to sand up a new program.

Last, the revenue replacement group is different from the others. Rather than funding a distinct program or service, the revenue replacement category allows governments make up for declined revenue collections caused by the pandemic and use SLFRF aid for general government services. Using revenue replacement provides governments with greater spending flexibility and is administratively less burdensome than other types of spending.

As the table below shows, spend rates vary substantially across expenditure category groups. At one end of the spectrum, the spend rate for the “premium pay” category is 93.5%. Thus, funding for these one-time compensation boosts was relatively easy to “get out the door”. Similarly, the spend rate for revenue replacement projects was also on the high side at 76.5%. Again, the high degree of flexibility and the minimum of administrative burden associated with this spending category likely explains this high spend rate. By contrast, spend rates for projects in the Public Health and Negative Economic Impact expenditure category groups are both nearly 33%, on the low end of the distribution. As our prior posts suggests, the administrative burdens involved with using SLFRF aid to stand up new programs is one important reason for the slower pace of spending in these projects.

 

Group	Adopted Budget (as of 9/30/2023)	Expenditures (as of 9/30/2023)	Spend Rate (Expenditures/Adopted Budget)
1: Public Health	$678,802,626	$220,731,748	32.5%
2: Negative Economic Impacts	$2,956,957,602	$965,176,883	32.6%
3: Public Sector Capacity	$112,378,089	$68,142,338	60.6%
4: Premium Pay	$94,139,756	$87,983,782	93.5%
5: Infrastructure	$167,481,532	$65,083,149	38.9%
6: Revenue Replacement	$5,846,536,296	$4,468,091,238	76.4%
7: Administrative	$161,844,161	$55,470,636	34.3%
8: Natural Disasters	$0	$0	N/A
9: Surface Transportation	$0	$0	N/A
10: Title I Projects	$0	$0	N/A

The bottom line here is that the rate at which governments have spent SLFRF funds appears to hinge at least in part on how they have decided to spend these funds. In a future blog post, we will expand our analysis to look at spend rates in state and local governments throughout the United States.

Download the data