Arkansas receives second $786.6 million; now, where to spend?

Arkansas has a good problem to have: What should it do with $842 million in federal funds sitting in the bank? That amount – actually $841,965,067.52 – is what’s left of money coming from the American Rescue Plan Act of 2021 (ARPA).

It provided $195 billion in Coronavirus State and Local Fiscal Recovery Funds to states, the District of Columbia and Puerto Rico. The act also provided $130 billion for local governments.

Arkansas has received two tranches each of $786,560,790.40. The second arrived May 19. The first came in June 2021. So far, $55.4 million has not been allocated from the first tranche. The money was transferred to the Arkansas ARP Steering Committee Holding Fund. States have until the end of 2024 to obligate the money, and until the end of 2026 to actually spend it.

The 20 states with higher unemployment rates received their full amount last year, while the rest, including Arkansas, received half last year and the rest this year. Funds can be used to replace lost public sector revenue; respond to the pandemic’s public health and economic impacts; provide premium pay for essential workers; and invest in water, sewer and broadband infrastructure.

In a press conference Friday, Gov. Asa Hutchinson said his priorities are broadband, workforce education and infrastructure – specifically water projects such as increasing the use of surface water for irrigation.

“It really comes down to how much can we allocate to each of those areas, and I have in my mind how they should be allocated out, but there’s a lot of other people who have a voice in that,” he said. “But now that we have that money, I do want to accelerate the presentation of those plans to the Legislature, and hopefully we’ll be in a position to do that in the near future.”

Spending proposals are received by the Department of Finance and Administration and reviewed by CTEH, a consultant with expertise in ARPA funding. The money is allotted to departments that present their proposals to a 15-member ARPA Steering Committee established and appointed by Gov. Asa Hutchinson by executive order and chaired by DFA Secretary Larry Walther.

If that committee approves the funding, it still must be approved by Hutchinson and the Arkansas Legislative Council’s Performance Evaluation and Expenditure Review Subcommittee.

There are no upcoming Steering Committee meetings scheduled.

Of Arkansas’ share, a large chunk, $309.2 million, has been approved for the Department of Commerce for broadband services. Another $2.5 million was approved for broadband implementation at Arkansas State Parks and welcome centers. The largest share of the money approved has been for health care-related expenses, including $245.6 million through the Department of Human Services and $121.2 million through the Department of Health.

The DHS funding included $129.2 million for surge staff funding and $116.4 million for unreimbursed costs. The Department of Health funding included $37.68 million for three alternative care facilities repurposed to accommodate hospital beds and staff. The PEER Review Subcommittee approved that allocation Aug. 6, 2021.

The rest of the money approved through the Department of Health has gone to increasing hospital bed capacity. The PEER Review Subcommittee has approved the following amounts for Department of Health allocations:

Aug. 6, 2021
– Unity Health, $10.54 million

Aug. 27
– Jefferson Regional Medical Center, $2.736 million
– St. Bernards Medical Center, $3 million
– CHI St. Vincent – Little Rock/Hot Springs, $12.42 million

Jan. 11, 2022
– Baptist Health Medical Center – Conway, $3.528 million
– Baptist Health – Van Buren, $1.386 million
– Baptist Health – Fort Smith, $3.024 million
– Conway Regional, $7.65 million
– CHI St. Vincent – Hot Springs, $6.75 million
– CHI St. Vincent – Little Rock, $6.75 million
– Mercy Hospital Fort Smith, $3.6 million
– Mercy Hospital Northwest Arkansas, $4.052 million
– St. Bernards, $2.565 million
– Unity Health – White County, $7.875 million
– Washington Regional Medical Center, $1.44 million
– Arkansas Children’s Hospital, $1.5 million

The University of Arkansas for Medical Sciences has received three grants totaling $12.04 million: $5.625 million on Aug. 27, 2021 for surge staff funding through DHS; $4.7475 million on Jan. 28 to increase bed capacity through the Department of Health; and $1.668 million on Jan. 28 for the Arkansas Rural Connect Program through the Arkansas Economic Development Commission.

Another $48 million was approved for grants provided through the Department of Finance and Administration, though DFA does not play a role in funding decisions. That included $10 million to pay CTEH and $15 million to reimburse state agencies for purchasing pre-approved items such as personal protective equipment and sanitizing supplies.

Also receiving funding through DFA has been the Arkansas Alliance of Boys & Girls Clubs, which received $6.34 million; the Arkansas Coalition Against Sexual Assault, which received $6.29 million; and the Arkansas Coalition Against Domestic Violence, which received $8.28 million.

Two grants were approved but not yet awarded. A $1.75 million grant to Women and Children First for completing a building was returned May 2 after it was prematurely distributed. The funding will be distributed to the agency for victims of domestic violence at the proper time. A $375,000 grant to the Ozark Rape Crisis Center was returned April 27 after it was determined that it should have been funded over a multi-year period.