NLC Applauds Treasury’s Final Rule on Local COVID Relief Funds

Washington, D.C. -  Last week, the Treasury released the Final Rule for the State and Local Fiscal Recovery Funds (SLFRF) under the American Rescue Plan Act of 2021 (ARPA). The SLFRF program was created to assist state, local, and Tribal governments respond to the COVID-19 pandemic. National League of Cities (NLC) CEO and Executive Director Clarence E. Anthony issued the following statement in response to the final rule:  

“The SLFRF program is a lifeline for communities across the country, especially as our response to the COVID pandemic continues to evolve in the face of new surges. The National League of Cities applauds the work of the Treasury’s team in crafting the final rule and the team’s willingness to work with NLC and our state municipal league partners to reflect the needs of communities large and small across the nation.   

The changes in the final rule provide greater certainty in many areas where NLC and its members sought clarity, and will help cities, towns and villages have more confidence as they spend their SLFRF funds. For example, NLC heard from members with limited staff capacity that the revenue loss calculation outlined in the interim final rule made it challenging to calculate lost revenue, and therefore, municipalities might not use the money for government services. NLC commends the Treasury for creating a simplified, alternative method for determining revenue loss that will allow many smaller communities to use this category for government services.   

Further, in our comment letter to the Treasury on July 1, 2021, we argued that utility revenue, excluded under the definition of general revenue in the Interim Final Rule, should be included as part of the lost revenue calculation. NLC appreciates that the Treasury adopted this change in the Final Rule as it better reflects how many governments with municipally-owned utilities operate.  

Overall, NLC is grateful to the Treasury for listening to the issues we raised in our comment letter and taking many of those issues into consideration as they crafted the final rule. The changes will ensure that local leaders can use the funds to best respond to needs in their communities and speak to the power of municipal leaders coming together in influencing federal policy that impact all Americans.”