Back in February, I wrote about the unique uncertainty of the 2021-2023 state budget cycle. In addition to the principles they released in February, the co chairs of the Joint Committee on Ways and Means have now presented the framework that they intend to use when facing the daunting task of balancing Oregon’s budget during a global pandemic.

The American Rescue Plan Act (ARPA) is anticipated to bring about $2.6 billion in federal dollars to the State of Oregon. After maintaining current service levels for existing state programs and reserving 20 percent of the funds, $520 million, for use through 2024 as allowed by ARPA, the co chairs estimate that $780 million will be available for new, urgently needed programs and services in the 21-23 budget.

In addition to state assistance, ARPA includes $65 billion in direct and flexible aid to counties and cities. Oregon counties will receive roughly $818 million in direct federal aid. Individual counties can look up their allocations here. ARPA specifically allows these funds to be used for:

  • Responding to or mitigating the public health emergency with respect to the COVID-19 emergency or its negative economic impacts;
  • Providing government services to the extent of the reduction in revenue;
  • Making necessary investments in water, sewer, or broadband infrastructure; and
  • Responding to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of the county that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.

Counties will be required to submit “periodic reports” to the United States Department of the Treasury outlining how these funds are spent. Any counties that spend their dollars on impermissible uses will be required to repay Treasury with the amount misspent. The National Association of Counties (NACo) continues to post the latest Treasury guidance for these funds here.

With so many federal dollars on the table, spending plans for these funds have proliferated at both the state and local level. As expected, the price tag on proposed projects far exceeds the amount of funding available. County officials should reach out to their state legislators as soon as possible to ensure that duplication of project spending plans does not occur. 

While coordinating use of ARPA funds, county officials may also wish to discuss with their state legislators how to leverage the state-local partnership to mutual advantage. Rather than asking one government or another to spend on a mutual priority, counties may want to advocate for matching funds that could be used to pull off significant infrastructure investments. 

The Association of Oregon Counties (AOC) will continue to provide ARPA guidance to members as it becomes available. Staff will also continue advocating at the state level for local backfills to losses in the shared revenue streams of marijuana, alcohol, and tobacco.

Contributed by: Tyler Janzen | Legislative Affairs Manager