In March, Congress passed the American Rescue Plan Act (ARPA), which was the third tranche of fiscal stimulus aimed to address revenue and policy issues related to the COVID-19 pandemic. In July, the Treasury updated guidance to clarify permissible uses of funding. As promised, the Legislative Fiscal Analyst has released a supplement to their initial summary of ARPA and the bill’s implications for Utah, based on the latest information from the Treasury.
Original estimates were that the act would provide $8.3 billion in total federal revenues to the state, that figure has since increased to just under $9.2 billion. Most of the estimated increase in revenue are provided by agency-specific funding, expected to make its way to Utah in the form of grants. Direct and individual stimulus payment estimate also increased by nearly $160 million.
On the other hand, the estimate of Utah’s State Fiscal Relief Fund decreased from $1.52 billion to $1.38 billion. The State Fiscal Relief Fund provides broad discretionary spending authority as ‘revenue replacement’, allowing flexibility to use the funds in the place of estimated revenue declines associated with the pandemic. Utah’s economists estimate that the state will have sufficient revenue replacement dollars to cover all uses proposed in the 2021 First Special Session.
A detailed outline of the acceptable uses for the State Fiscal Relief Fund are available in the Updated Summary of the American Rescue Plan Act.