Oct 3, 2021 - Politics & Policy

States, cities slow to spend federal COVID relief funds

Children attend a learning hub at the Minnie and Lovie Ward Recreation Center as they play in the park on July 23
Children attend a learning hub at the Minnie and Lovie Ward Recreation Center as they play in the park on July 23 in San Francisco. Photo: Liz Hafalia/The San Francisco Chronicle via Getty Images

Hundreds of mayors implored Congress earlier this year to take "immediate action" on a massive COVID-related relief package that included billions of dollars to invest into their communities. However, since receiving the initial funding in the spring, very little has been used, according to an analysis from the Associated Press.

The big picture: As of this summer, a majority of the states that benefited from the economic package had spent just 2.5% of their initial allotment while large cities had spent about 8.5%, according to financial reports obtained by AP.

  • President Biden signed the measure into law in March and the Treasury Department began distributing the money along with spending guidelines in May.
  • The law gives states until the end of 2024 to make spending commitments, and many state and local governments have reported they are still working on plans for their share of the $350 billion package, per AP.
  • Biden administration officials have not expressed concern about the pace of the program, with the plan's coordinator, Gene Sperling, saying, "The fact that you can spread your spending out is a feature, not a bug, of the program. It is by design."

What they're saying: "We want to try to find things that are going to benefit Missouri not just next year or the year after, but 10 or 20 years down the road," Dan Haug, a Missouri budget director, told AP.

  • "That takes some thought and some planning," he added.
  • "The state was in no rush at all," Colin Keeler, a South Dakota official, said, per AP. "The cities wanted to get theirs, but we needed to be prepared."
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