• Thu. Nov 24th, 2022

Where is the state’s $5.4 million in ARPA funding going?

ByDenise T. Tatum

Nov 23, 2022

The federal government allocated funds from North Carolina’s American Rescue Plan Act in two ways — $3.2 billion to county and city governments and $5.4 billion to the state government.

Carolina Public Press spent the past year researching how ARPA funds are being used by local governments in western North Carolina.

To conclude the project, CPP examined how the other funds, the $5.4 billion distributed directly to the state, are being spent.

The governor’s plan

ARPA, a multitrillion-dollar federal law signed into law in March 2021, provides relief funds to state, local and tribal governments negatively affected by the coronavirus pandemic “to provide immediate and direct assistance to families and workers , affected by the coronavirus pandemic COVID-19 crisis,” according to the US Treasury Department.

Governments can use ARPA funds for specific purposes, including addressing public health concerns, replacing lost revenue, expanding broadband, and providing premium payments.

District commissioners and city council members across the state made spending decisions on the $3.2 million in ARPA funds distributed to local governments. These decisions ranged from repairing sewage systems to strengthening local farmers’ markets.

For the state’s $5.4 billion ARPA allocation, the NC General Assembly made the spending decision, including Gov. Roy Cooper‘s ARPA recommendation approved in state budget in November 2021.

In the recommendation, Cooper wrote that the state’s ARPA allocation should be used to “help the families hardest hit by the pandemic, improve our infrastructure, prepare our workforce, encourage business development and innovation, and the… to position government to best serve our people.”

Invest in infrastructure

More than half of North Carolina’s ARPA funds are dedicated to improving state infrastructure or systems and facilities that sustain the community and economy.

To date, the state has allocated approximately $2.9 billion (of the $5.4 billion) in ARPA funding to address infrastructure deficiencies, according to the NC Pandemic Recovery Office. Of that amount, approximately $1.8 billion is reserved for water system improvements, such as repairs to wastewater treatment plants.

“It’s the edition category that’s probably going to be sold the longest,” he said Lee LileyDirector of Pandemic Recovery in Gov. Roy Cooper’s office.

“Building infrastructure takes time, but it’s really transformative for a lot of places,” Lilley said.

The state uses ARPA to fund NC Department of Environmental Quality grants that local governments and nonprofit organizations can apply for to receive funding for public water system projects.

The projects, many of which will take place along the coast, will modernize aging infrastructure to ensure clean drinking water for local residents.

“Spending money on water and sanitation, I think, is fundamental for companies to be able to invest and grow. It is fundamental that communities can increase their housing stock,” he said Scott Mooneyham by the NC League of Municipalities, which advised local governments through ARPA allocations.

Other state ARPA-funded programs include the $48 million Rural Transformation Grant, which provided funds to rural communities to improve communities, revitalize inner cities, and strengthen neighborhoods.

Broadband in “every corner of the country”

In addition to improving the water system, the state’s other major infrastructure investment is through its broadband expansion initiative, for which the NC General Assembly has allocated $660 million in ARPA funding.

Internet access growth in North Carolina has become more important during the COVID-19 pandemic, NCDIT Secretary for Broadband and Digital Equity Nate Denny said.

“The pandemic has highlighted the urgency of access to high-speed internet connectivity for every part of modern life: the ability to work from home, study from home, do homework, access telemedicine services to apply for jobs or access government services,” Denny said.

Most of North Carolina’s ARPA broadband rollout funds were used to support grants from the NC Department of Information Technology, specifically the Growing Rural Economies with Access to Technology grant and the Completing Access to Broadband program.

Through these programs, the state uses its ARPA funds to match funds that local governments or ISPs have pledged for broadband infrastructure projects.

A total of $750 million of state ARPA funding, according to the state budget, goes to the GREAT grant and CAB program.

“Our goal here is to eventually connect every corner of the state to high-speed internet,” Lilley said.

Broadband infrastructure projects funded by the GREAT grant will provide high-speed Internet access to 487,000 homes and businesses in North Carolina, according to the Office of the Governor.

help small business

The second largest portion of North Carolina’s ARPA funding — $666 million — has been disbursed to businesses and organizations ranging from public libraries to museums.

Within this spending category, more than $500 million in ARPA funding has been allocated to the Business Recovery Grant, which is open to small businesses that have experienced at least a 20% economic loss.

More than 7,000 companies have received funding under the program, according to the governor.

The state’s remaining $1.9 billion will be used for COVID-19 research, public school teacher bonus payments, housing benefits and more.

Challenges with ARPA

Despite billions of ARPA dollars allocated to address the negative impact of the COVID-19 pandemic, many of the problems remain.

According to the US Environmental Protection Agency, an estimated 4 million North Carolina residents do not have reliable internet access, and $16.72 billion worth of water infrastructure projects will be needed statewide over the next 20 years.

“Despite the significant funding we have received through ARPA and other funding sources during the pandemic, is it able to address all the challenges local governments and communities are facing? Absolutely not. The scale of these challenges is far greater than the resources available,” he said Nathan Ramsey by the Land of Sky Regional Council, which assisted local governments in western North Carolina with ARPA allocation.

All ARPA funds must be allocated by 2024, a deadline set by the state when ARPA entered the state budget. Any company or organization receiving the funds must spend them by December 2026.

Key milestones for the American Rescue Plan Act from 2021 through 2026. Photo credit: North Carolina Association of County Commissioners

Interested in pursuing ARPA funding?

CPP will be putting together two toolkits for community members and journalists over the next month. Also see these resources for more information: