How Federal ‘Revenue’ Relief Masks Local Government Spending

Millions of dollars, few details

Passed in March 2021, the US bailout was touted as an economic boost, intended both to speed recovery in the short term and to deal with the far-reaching impacts of the pandemic. It offered more than double the amount of direct aid to states and local governments ($350 billion) than the CARES Act, plus the time and freedom rarely afforded by federal dollars, giving jurisdictions until 2024 to allocate and until 2026 to spend the money.

Eli Byerly-Duke, senior research assistant at the Brookings Institute who works on their Local Government ARPA Investment Tracker, said the aid package was designed to counter what many Democratic lawmakers perceived as shortcomings in the federal response to the economic crisis of 2008.

“There was a widespread feeling after and during the Great Recession that too many American workers paid the price for a great economic collapse that was not their fault, and that the recovery took too long to reach working people. “, Byerly-Duke said. “Part of the takeaway that many had was that the federal government could have intervened in a more drastic way.”

This story is part of Crosscut’s WA Recovery Watch, an investigative project tracking federal dollars in Washington State.

Cities and counties must submit annual reports on direct funding from the US Treasury, adjusting their spending into one of four categories and describing each project funded by ARPA dollars. For many smaller jurisdictions, the first report was due April 30 and the Treasury issued a large batch of this data in mid-July. But instead of detailed reporting, entities that designate funds as revenue replacement can now tick “yes” to the $10 million allocation and report as much as they want — or none at all — about how this money will be spent.

Most local governments in Washington took advantage of the new flexibility: Of 310 local governments in the state reporting spending on the federal government, 267 governments, or 86%, had claimed the standard allocation, according to Treasury data. Of the nearly $2.7 billion in direct dollars paid to local governments in Washington, officials have so far claimed 28% in revenue replacement, for a total of more than $752 million.

Of the 21 counties that reported income replacement expenditures, a few provided detailed breakdowns of specific projects. Stevens County, in Washington’s northeast corner, submitted 16 reports detailing purchases as small as $4,000 for Association of Washington Counties membership dues.

But others provided brief general descriptions of millions spent.

Wahkiakum County reported “funds used for salaries and operational services.” Franklin County submitted, “Funds to be used for various projects, priorities being identified.” Yakima County just wrote: “Income Replacement Fund”.

The abbreviated reporting process leaves it up to local governments to decide how much information to offer their residents about ARPA spending.

Seattle has a interactive tracker which breaks down each line item. Kenmore has a Web page with pie charts, FAQs and a drop-down menu with details about each allocation. They also made a online survey where residents could vote on specific programs.

But many counties in the state don’t even have basic public accounting of where ARPA dollars go. Unless residents regularly attend legislative meetings, comb through budget documents, or request information directly from their representatives, relief dollars can be spent more or less invisibly.

Crosscut has filed registration requests with more than 30 Washington counties seeking line-by-line counts of their ARPA allocations. Some returned detailed spreadsheets with descriptions of each expense; others offered listings with phrases like “sheriff gear” or “website upgrade.” (These documents are available in Crosscut’s Recovery Watch Recording Library.)

In some cases, county officials have responded by citing revenue replacement without providing documentation or offering minimal descriptions similar to those in Treasury reports.

Benton County, which received $19.8 million from ARPA, provided documents showing approximately $8 million in ARPA commitments. But several officials there have consistently refused to say how the $10 million claimed by the county in “revenue replacement” is being used.

In response to an email request from Crosscut, Benton County spokeswoman Shyanne Palmus wrote that the $10 million would be spent on “general government services…for county departments and functions.” .

Shon Small, chairman of the Benton County Board of Commissioners, posed questions about his county’s $10 million claim in revenue replacement to Linda Ivey, the county’s chief financial officer, as did the county auditor for Benton. Ivey asked Crosscut to file for registration and did not respond to an emailed list of detailed questions about how income replacement funds are tracked and allocated. An unsigned response to Crosscut’s request for documents said the funds were deposited into the county’s general fund, but did not explain how they were spent.

The Benton County website does not have a section dedicated to ARPA.