COVID-19 Federal Assistance e311


Lost Revenue & Revenue Replacement

Funding Source

American Rescue Plan Act

When should a municipality calculate revenue loss and how does that calculation impact the ability to use ARP funds?

Based on the U.S. Department of the Treasury’s (“Treasury”) guidance, the calculation of revenue loss is not a requirement for municipalities to apply for and receive their allocation of Coronavirus Local Fiscal Recovery Funds (“CLFRF”) pursuant to the American Rescue Plan Act of 2021 (“ARP”) funding. CLFRF authorizes $130.2 billion for use by metropolitan cities, non-entitlement units of local government, and counties. The calculation of revenue loss (or lack thereof) does not impact the overall amount of funding.

Treasury’s Final Rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount for the provision of government services.[1]

According to Treasury guidance, recipients may calculate revenue loss at four distinct points in time, either at the end of each calendar year (e.g., December 31 for years 2020, 2021, 2022, and 2023) or the end of each fiscal year of the recipient. Under the flexibility provided in the Final Rule, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance.[2]

Municipalities that do not calculate revenue loss will be allowed to select a standard allowance of $10 million to use for the provision of government services. This option provides municipalities with the “flexibility to use minimal administrative capacity on the calculation.”[3]

Last Updated: January 28, 2022

[1] Treas. Reg. 31 CFR 35 at 7, available at:

[2] U.S. Department of the Treasury Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule, at 9, available at:

[3] Treas. Reg. 31 CFR 35 at 392, available at: