In a previous article, I discussed the enactment of the American Rescue Plan Act of 2021 (ARPA), which provides for almost two trillion dollars of new federal spending to combat the ongoing impact of the COVID-19 pandemic. ARPA provided approximately $350 billion of new funding to tribal governments, states, territories, and local governments, $14 billion of which was estimated to be received by Pennsylvania and its municipalities. Initial federal ARPA funding to the states and their political subdivisions was estimated to begin as early as May.

By now, Pennsylvania and its municipalities have received at least a portion of their ARPA funds. But what can they do with it? On May 17, the U.S. Department of the Treasury (the department) published an interim final rule providing guidance to recipients on the use of ARPA funds. Consistent with ARPA, the department in the interim final rule established four broad categories of authorized spending, public health and economic impacts; premium pay; revenue loss; and investments in infrastructure. Each of these categories is discussed below.