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Can municipalities use ARP funds to fund educational programs (e.g., Pre-K classrooms or gun violence prevention programs)?

According to guidance issued by the U.S. Department of Treasury (“Treasury”), Coronavirus Local Fiscal Recovery Funds (“CLFRF”) from the American Rescue Plan Act (“ARP”) can be used to fund educational programs with the goal of addressing the social, emotional, and mental health needs of students within certain parameters.

First, CLFRF funds can be used to pay for government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency.[1] In essence, the amount a municipality is able to claim as a revenue loss due to the pandemic can be used for the provision of government services, including costs for “school or educational services.”[2] There is currently no guidance from Treasury specifically addressing the use of ARP funds for gun violence prevention programs.  Treasury guidance does indicate that in certain circumstances it is possible that municipalities could interpret these costs to include pre-kindergarten funding.

Second, in discussing the use of funds within the context of a Qualified Census Tract, Treasury confirms that certain types of educational services, are eligible uses outside of the lost revenue provision discussed above.[3] Treasury noted that “school closures and the transition to remote education raised particular challenges for lower-income students, potentially exacerbating educational disparities, while increases in economic hardship among families could have long-lasting impacts on children’s educational and economic prospects.” In order to enhance education support to mitigate the impact of the pandemic on these students, municipalities can consider providing:

  • new, expanded, or enhanced early learning services, including pre-kindergarten, Head Start, or partnerships between pre-kindergarten programs and local education authorities, or administration of those services;
  • assistance to high-poverty school districts to advance equitable funding across districts and geographies;
  • evidence-based educational services and practices to address the academic needs of students, including tutoring, summer, afterschool, and other extended learning and enrichment programs; and
  • evidence-based services to address the social, emotional, and mental health needs of students. [4]

The ARP Interim Final Rule further delineates several other eligible educational programs as support for disproportionately impacted populations and communities.[5]

Last Updated: June 10, 2021

 

[2] U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds: Frequently Asked Questions (updated June 8, 2021), Q3.8 at 11, https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.

[4] Id. at 40.

[5] Id.