On May 10, the U.S. Department of the Treasury rolled out the regulation implementing the American Rescue Plan aid to state and local governments. This rulemaking controls how states and localities can allot the $350 billion and sets the stage for new supports and relief for aging services providers. There is also a fact sheet and an FAQ document for additional information.

How much money is available and when?

Readers can see how much funding states will receive, in addition to counties, cities, and other municipal governments.

Per the guidance, here is how the money will go out:

• States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the latest available data as of the date of certification will receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches.
• Local governments will receive funds in two tranches, with 50% provided beginning in May 2021 and the balance delivered approximately 12 months later.

So in many places, this is money that is available for more than just the immediate term. Recipients have until the end of 2024 to spend down the funds.

What can the money go towards?

States and localities have considerable flexibility with respect to how to spend it. Broadly speaking, funds can cover efforts that:

• Support public health expenditures,
• Address negative economic impacts caused by the public health emergency
• Replace lost public sector revenue
• Provide premium pay for essential workers
• Invest in water, sewer, and broadband infrastructure

A significant portion of these dollars will likely go towards replacing lost revenue, particularly at the local levels, but many governments will likely be able to use the dollars for other purposes- including for aging services.

The guidance is very flexible and doesn’t require or forbid much in terms of spending. Throughout the document, Treasury lists ways states can use the money, but the phrasing is often loose (e.g., non-limiting phrases like “including one or more of the following”).

Here are some examples from the guidance of how states and localities could use the dollars to support aging services:             

• Premium pay programs for eligible essential workers. Critically, the guidance defines eligible workers to include HCBS workers and health care workers (e.g., those working in nursing homes).
• Coverage of COVID-19 expenses for skilled nursing and long-term care facilities and other health settings.
• Loans and grant programs for small businesses and nonprofit organizations, which could include nonprofit aging services.
• Aid to “impacted industries,” for which a strong case could be made for aging services.
• Funding for the development of affordable housing and the provision of supportive housing services.

With the American Rescue Plan money set to reach state and local governments in the coming weeks and months, it is crucial for aging services providers to be at the table and ensure that governments at all levels ensure support for older adults and the providers that serve them. We’ll continue to work with and help empower our state partners and members across the country to secure this important goal.

We also anticipate implementing guidance for the American Rescue Plan’s Medicaid HCBS enhanced federal match funding, which is anticipated to provide $12.7 billion specifically to Medicaid HCBS (state plan and waiver services, PACE and more).