The American Rescue Plan will send $2.7 billion to Vermont, including $1.3 billion in direct aid to state government. But there is no roadmap from the federal government on how best to spend the money.
The Senate has already allocated about $60 million for H.315, the Legislature’s mini-coronavirus relief bill. In addition, the House is looking to spend $650 million of the stimulus funds in the fiscal year 2022 budget.
The Legislature has a narrow window to approve appropriations (between now and May), but it’s not entirely clear what the federal guidelines will be.
The U.S. Department of the Treasury is expected to release parameters this week, but Stephen Klein, chief fiscal officer for the Vermont Legislature, told members of the Senate Committee on Health and Welfare that spending regulations may not be issued until the end of 2021.
“This bill just passed and one of the problems with the new administration is it sometimes takes six months for the people in place to do the work,” Klein said.
The federal law, however, does clearly stipulate that money can be spent for “water, sewer, and broadband infrastructure.”
The House looked at that language and promptly decided to invest $150 million in broadband expansion. Lawmakers then put $100 million into the state’s Clean Water Fund.
But even these allocations are not certain. Klein said it’s possible the federal government will put limits on how that money can be spent.
The House has also created a $38 million General Fund reserve which would give the Legislature more flexibility to move money around next year when guidance is expected to be clearer.
“The moral of the story is: We’re focusing on big things right now, there’s a lot of money here — use is unclear,” Klein said.
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