State, local governments continue to spend pandemic aid as deadline looms

States and local governments continue to spend the $350 billion given out by the federal government during the COVID-19 pandemic.

A Congressional watchdog report found that states have obligated 84% ($163.7 billion) and spent 60% ($117.3 billion) of the Coronavirus State and Local Fiscal Recovery Funds as of March 31, the most recent data available. Local governments reported obligating 76% ($95.8 billion) and spending 60% ($75.8 billion) of the awards during the same period.

State and local governments that got SLFRF money through the American Rescue Plan Act of 2021 must obligate the money by Dec. 31, 2024, and generally have until Dec. 31, 2026, to spend it.

State and local governments used the vast majority of the money distributed through the program to replace revenue lost during the pandemic and deal with the negative effects of the COVID-19 outbreak, according to the latest report from the U.S. Government Accountability Office.

Most of the $117.3 billion in SLFRF awards the states reported spending was used to replace revenue or address the negative economic impacts of COVID-19. Figures show that states reported spending 45% ($53.2 billion) of their SLFRF awards to replace revenue and 39% ($45.5 billion) of their awards to address the negative economic impacts of COVID-19.

Thousands of small governments that got federal funds have not yet reported how they spent or plan to spend that money. Some 4,272 localities, which received $2 billion in SLFRF awards, had not submitted a project and expenditure report as of March 31, 2024. The GAO said it plans to evaluate Treasury's oversight of such recipients in a future report.

Congress approved the money to help cover a range of costs stemming from the health and economic effects of the COVID-19 pandemic. And states and local government have used the money for a wide array of projects and services.

Erie County in Pennsylvania spent $2.7 million to support the operations of a county-owned skilled nursing home. The city of West Covina in California used $1.8 million to buy two fire trucks. Ocoee, in Florida, spent $10 million on salaries for police officers and firefighters. Nightmute, a city in Alaska with about 300 residents, used its money ($11,601) for a household assistance package for residents that included stove oil.