Idaho receiving $5.6 billion through ARPA. Now the hard work begins.

By Melissa Davlin, Idaho Reports

Image source: “Updated Review of the American Rescue Plan Act of 2021,” Legislative Service Office

Idaho is anticipating $5.65 billion in direct payments, grants, and fiscal relief from the American Rescue Plan Act, signed into law in March. Figuring out how to spend that money is shaping up to be a complex task, as lawmakers heard during the first meeting of the Interim Committee on Expenditure of ARPA Funds on Thursday.

During the meeting, legislators from both parties and chambers heard about the intricacies and unknowns of ARPA from Paul Headlee, division manager for the Legislative Services Office. Headlee gave an overview of major portions of Idaho’s ARPA funds, explaining how the billions are split among three main buckets of money: Grant Programs to State Agencies, with $1.48 billion; State and Local Fiscal Recovery Funds, with $1.8 billion, and Economic Stimulus Programs Outside of State Government, coming in at $2.3 billion. 

Within those buckets are dozens of individual programs and grant opportunities for state and local government agencies. LSO staff identified 56 programs that would require legislative approval before state agencies can spend the money.

And figuring out those intricacies is taking a lot of work. Prior to the meeting, LSO staff prepared a 74-page document that detailed many of the programs, as well as requests that have already been made. (View the document below.) The office has also assigned staff members to tackle specific programs in addition to their normal budgeting duties. 

Some of those ARPA parameters haven’t yet been set. The state hasn’t received final guidance from the federal government on some of those programs, such as for water and sewer projects and broadband — programs of particular interest for many of Idaho’s rural communities, which have limited tax bases to expand wastewater capacity or tackle other improvements.

But some of that guidance may not come before the Sept. 1 deadline for state agencies to submit budget requests for fiscal year 2023. 

Sen. Jeff Abenbroad asked Headlee if LSO is set up to handle the additional workload. The office is currently interviewing for a new analyst — a position approved by the joint budget committee in March  — but pointed to the potentially massive workload that state agencies are facing as the money starts flowing through.

“On an average year, DEQ is awarding maybe a couple dozen projects,” Headlee said. “It could be a concern if 100, 200, 300 applications come in.” 

House Speaker Scott Bedke expressed similar concerns. “You dump this kind of money, for want of a better term, into IDWR or DEQ… I think we need to get a similar assessment from these agencies on where the bulk of the work will happen,” he said. (Shortly after the meeting, Bedke, who is running for lieutenant governor, announced a plan to work with the Idaho Water Resources Board to use ARPA funds to increase the state’s aquifer recharge capability. Gov. Brad Little has also written to the Department of Treasury asking for more allowance so states can use ARPA funds for aquifer recharge.) 

The committee also discussed how lawmakers on the Joint Finance-Appropriations Committee will handle the budget requests in addition to their normal appropriation process. Bedke floated the idea of using a Millennium Fund-type model, in which a standing committee of lawmakers studies ARPA programs in-depth and makes recommendations to the joint budget committee. 

The next meeting of the ARPA committee has not yet been set, but already, lawmakers are anticipating it will be a long one. 

“This is a great start of just understanding the program better,” committee co-chair Senate President Pro Tem Chuck Winder said at the conclusion of the meeting. “The hard work probably remains to be done.”

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