COLUMBUS, Ohio — Ohio lawmakers advanced a bill to appropriate $422 million in American Rescue Plan Act (ARPA) funds to cities, villages and townships to support their recovery from the COVID-19 pandemic.

What You Need To Know

  • The Ohio House could vote on HB 377 as soon as next week

  • The bill appropriates $422 million of American Rescue Plan funds

  • Some lawmakers worry stimulus relief will worsen inflation

While counties and large cities receive their ARPA funds directly from the federal government, the Ohio General Assembly needs to pass legislation in order for “non-entitlement units” of local government, which are typically areas with populations less than 50,000, to receive the federal relief. 

The release of funds from the $350 billion State and Local Fiscal Recovery Fund Program, part of the $1.9 trillion stimulus package, comes in two rounds. 

In May 2021, the U.S. Treasury began releasing half of the funds, and the remaining balance gets released a year after the first round. 

With the release of the second round of funding imminent, the Ohio House Finance Committee held three hearings this week as lawmakers work to fast track the appropriations bill, HB 377. On Thursday, the committee advanced the legislation with only one opposition vote. 

The full chamber is expected to vote on the bill soon, Committee Chairman Scott Oelslager, R-North Canton, told Spectrum News.  

“A vote could come as soon as next week. The Department of Treasury will be depositing the ARPA funds at some point this month and those dollars will be allocated to local entities soon thereafter,” he said. 

The bill follows the same population-based allocation model used for the last round of relief dollars, which was approved in HB 168 last year. You can find how much money your community could receive here.

Local governments receiving stimulus dollars have had broad discretion to use the one-time funds, which must be spent by the end of 2024, after the Treasury provided final guidance in January. 

Governments in Ohio are using their ARPA funds to invest in roads and bridges, water and sewer projects, broadband, safety services and updates to public facilities, among other uses. 

Marisa Myers, director of government affairs for the Ohio Township Association, testified that many jurisdictions are still in the process of coming to funding decisions for the first tranche of relief funds.

“I can tell you, without a shadow of a doubt, the thing we've heard about most often from our members is using it on road maintenance. That's what they want to do with the funding. They want to be able to pave the roads, update the roads and address the infrastructure that has just gone by the wayside in the last few years,” she said. 

She explained that there are few things that jurisdictions can’t do with the funds. 

“The uses of the funding are pretty flexible. There are three major categories that they can't spend it on. They can't put it in a rainy day fund. They can't pay basically a judgment or a settlement with it and they can't pay debt service with it,” she said. 

Several Republican lawmakers expressed concern in Wednesday's hearing that the second round of ARPA funds will worsen inflation in the U.S., including Rep. Reggie Stotlzfus, R-Paris Township, who voted against the bill.

“I just will remind everybody that the reason we have the inflation we are seeing today is because of all the money that has been pumped into our economy via the federal government, so this money is troubling to me in some aspects because it's just exacerbating the issue of inflation and the ongoing supply chain and everything else we're seeing,” he said. 

A small number of Ohio jurisdictions that did not apply for a first round of funds will be ineligible to receive funds in the second round, according to Treasury guidance. 

Rep. Daniel Troy, D-Willowick, emphasized Wednesday that jurisdictions cannot expect to receive this funding in future years. 

“I'm a little concerned about the fact that there's an indication here of this being spent on general government services. It almost sounds to me like it should be like postponed capital improvements or one time expenditures that this money should be used at,” he said. 

Some democrats questioned why stimulus dollars haven’t been spent by local governments that are still allocating funds from the first tranche. 

“I'm really concerned– I want to make certain that, you know, what I'm hearing is people want to see the money. They want to see the money get to the feet on the street,” he said. “I'm excited about this money going to local communities, but want to make certain that it's actually being used to benefit the community.”

Thomas Wetmore, legislative advocate for the Ohio Municipal League, said municipalities will use some of their funds for policing. On Friday, President Joe Biden urged local leaders to use ARPA funds on public safety.

“These funds will be instrumental in ensuring our first responders and law enforcement are better equipped to handle the daily responsibilities they face when serving as our first responders,” Wetmore said.