The federal government enacted the American Rescue Plan on March 11, 2021, which included $1.9 trillion in total investments for state and local governments, infrastructure investments, and direct supports to families and communities.
Here are some of the broad-based features of the American Rescue Plan that are important for North Carolina:
- No net tax cut provision means that any reduction in taxes collected (beyond conformity with federal tax changes) would reduce aid to the state dollar for dollar. A tax cut that is offset or revenue neutral would not trigger the loss of state aid.
- Significant dollars will be delivered through block grants or formulas which could be subject now to NC General Assembly appropriation
- Aid to state and local governments can be used to cover costs through December 31, 2024 and while approved uses of dollars still subject to more detailed Treasury guidance, broad uses have been defined as:
- To respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
- To respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the metropolitan city, non-entitlement unit of local government, or county that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;
- For the provision of government services to the extent of the reduction in revenue of such metropolitan city, non-entitlement unit of local government, or county due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year of the metropolitan city, non-entitlement unit of local government, or county prior to the emergency; or
- To make necessary investments in water, sewer, or broadband infrastructure.
A just recovery requires everyone to invest in our shared future. Federal policymakers have already committed to historic investments in our recovery – now it is up to Governor Cooper and the North Carolina General Assembly to enact their own investments in a better future. Similarly, essential workers and local businesses have made significant contributions throughout this crisis – now wealthy households and profitable corporations need to pay their fair share.
State and Local ARP Resources
The Budget & Tax Center is continuing to analyze the impact of the American Rescue Plan on North Carolina. Please check back for updates and contact us if you have any questions.
- Flyer (Spanish and English): The Child Tax Credit: an important lifeline for families
- Data: Click here to view and download a comprehensive list of the ARP items from the NC House and Senate budgets
- Brief: NCGA proposals for American Rescue Plan funds lack vision, transparency, and public input
- Blog: NC needs to make sure every eligible family receives the expanded Child Tax Credit
- Fact Sheet: Impact of the American Rescue Plan on North Carolina
- Fact Sheet: State and Local Fiscal Recovery Funds Present Opportunities to Address Needs in Communities
- Blog: Gov. Cooper introduces the first North Carolina plan for rebuilding with American Rescue Plan resources
- Blog: Community voices are essential to getting American Rescue Plan investments right
Local ARP Resources
- Local Budget Toolkit – available in Spanish and English
- Local government ARP toolkit from the Southern Economic Advancement Project (SEAP)