ARPA allocations provide potential relief for UP businesses, communities, and non-profits

UPPER PENINSULA, MI (April 15, 2021) – On March 11, the $1.9 trillion American Rescue Plan Act (ARPA) was signed into law. A number of ARPA provisions relate directly or indirectly to economic development and community development interests in the Upper Peninsula. Below is a very brief summary of these provisions.

For more information on the specifics of each provision, or the dozens of omitted provisions that impact other important subjects, such as education, healthcare, and human services, consult the Michigan Senate Fiscal Agency’s full ARPA analysis.

A total of $10.1 billion was allocated to the State of Michigan as “State and Local Recovery Funds.” Of that total:

  • $4.4 billion is dedicated to local units of government, of which $87.4 million was allocated to local units of government in the Upper Peninsula, with very broad parameters on how that money can be spent, as outlined below.
  • $5.6 billion is dedicated to the State, which remains unallocated and will require legislative action to allocate.

The State was also allocated $3.7 billion in Elementary and Secondary Emergency School Relief Funds (ESSER). Of that, $61.5 million was dedicated to Upper Peninsula Schools.

The Upper Peninsula will receive a total of 148.9 million (1.8%) of the State and Local Recovery Funds and the Elementary and Secondary School Relief Funds that have been allocated so far.

While the Department of Treasury is currently promulgating rules to further guide how this money can be spent by local governments, the Act provides that State and Local Recovery Funds may be used to:

  • respond to the COVID-19 public health emergency, including assistance to households, small businesses, nonprofits, and aid to affected industries;
  • to pay essential government workers during the public health emergency;
  • to provide grants to employers with employees who perform essential work;
  • to replace State and local government revenue to the extent that they are lower than revenues in fiscal year 2018-19; and
  • to invest in water, sewer, or broadband infrastructure.

Additional nationwide and statewide ARPA provisions include:

Food Supply Chain and Agriculture Pandemic Response – $4.0 billion nationwide: Purchase and distribute agricultural commodities to those in need and provide grants to food processors, distributors, and processing facilities.

Emergency Rural Development Grants for Rural Healthcare – $500 million nationwide: Establishes a pilot program to fund rural medical facilities that increase capacity for vaccine distribution and COVID-19 testing and provides funding for supplies, telehealth, and temporary or permanent structures construction.

Higher Education Emergency Relief Fund – $39.6 billion nationwide; $1.0 billion statewide: Funds must be spent by each institution by Sept. 30, 2023, and at least half must be used for emergency student financial aid.

Child Development and Care – $15.0 billion nationwide; $439.2 million statewide: Allows states to expand eligibility to essential workers, regardless of income, which is normally capped at 85% of the median state income.

Child Care Stabilization Grants – $24.0 billion nationwide; $702.5 million statewide: Supports operations of childcare providers that are either open or temporarily closed.

Community Health Centers – $7.6 billion nationwide; $227.4 million statewide: Awards grants to community health centers and federally qualified health centers. (The U.P. is home to 22 federally qualified health centers).

Community Mental Health Service Block Grant Program – $1.5 billion nationwide; $41.4 million statewide: Funds prepaid inpatient health plans (PIHPs) and community mental health service providers (CMHSPs) to provide mental health services.

Community-Based Behavioral Health Services – $50.0 million nationwide; $1.5 million statewide: Funds to be allocated to municipal agencies and other behavioral health organizations to address community mental health needs exacerbated by the COVID-19 pandemic.

Pediatric Mental Health Care Access – $80.0 million nationally; $2.4 million statewide: Local entities, including tribal entities, will have to apply and provide at least 20% of the requested federal funds as matching funds.

State Small Business Credit Initiative – $10.0 billion nationwide: To set up programs that can leverage private capital for low-interest loans and investments to help entrepreneurs and small businesses. The State would partner with private lenders to extended credit to small businesses leveraging $10 for every $1 in Federal funding.

Cybersecurity and Infrastructure Security Agency – $650 million nationwide: For cybersecurity risk mitigation, although at this point it is unclear if funding may be directed towards grants or providing significant assistance to state and local offices.

Modifications to Paycheck Protection Program (PPP) – $7.25 million nationwide: Expands eligibility for the PPP to include additional nonprofits and digital news services.

Targeted Economic Injury Disaster Loan (EIDL) Advance – $15.0 billion nationwide: Expands targeted EIDL emergency grants for immediate needs, such as sick leave, payroll, increased material costs, rent or mortgage on the business property, and debt payments that cannot be covered because of loss of revenue.

ARPA includes additional nationwide provisions for restaurants, airports, and aviation manufacturing jobs (payroll support), as well as crisis support for unemployed workers, expanded child tax credits, increased maximums on earned income tax credits, and credits for paid sick and family leave.

A complete analysis of the local provisions by the Michigan Senate Fiscal Agency can be found through this link:
https://www.senate.michigan.gov/sfa/Publications/Presentations/SFA_ARP_Presentation03-24-2021.pdf.

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