After years of budget cuts and deficits, both city and parish governments are suddenly flush with cash. The American Rescue Plan Act appropriated billions to help states’ and local governments’ fiscal recovery, sending $36.1 million to the city of Lafayette and $47.4 million to the parish. That’s an enormous sum of money.
It puts the city’s general fund balance at roughly $70 million — more than three times the minimum reserve required by LCG’s fiscal policy — and adds the equivalent of four years of revenue to the parish’s general fund in one fell swoop.
But it’s also an enormous challenge. All of this money has to be appropriated by 2024 and spent by 2026, so we can’t just sock it away and live off the interest. But it can only be spent on eligible expenses; the U.S. Treasury released dozens of pages of interim rules defining those expenses in May. (Here’s an easier-to-digest fact sheet.) It’s a historic windfall of money, but it’s not enough to accomplish everything the city or parish might want to do with it.
The final rules aren’t expected until fall, so we still don’t know for sure exactly how this money can be spent, but the interim rules give us a clearer sense for what types of projects will be eligible, which allows us to start the process of figuring out what our community’s priorities are.
This is a once-in-a-lifetime opportunity to make our community better, one we can’t afford to waste. The real challenge facing us is deciding the most impactful ways to spend this money. And local governments across the country are having open conversations with their communities and are already starting to announce plans for how they want to spend their money.
So let’s kickstart this important conversation by reviewing some of the ways this money could be spent in Lafayette.
How do you think Lafayette should spend its ARPA money? Tell us here.
Supporting the public health response
People are taking their masks off, but the pandemic is still ongoing. Effectively, any public health response to the pandemic is an eligible expense — everything from vaccination programs to PPE to the enforcement of public health orders to the enhancement of public health data systems to capital investments in public facilities to behavioral health to payroll for healthcare workers, and so much more.
That means if LCG thinks fighting the pandemic is a priority, it’s got funding for anything it can dream up to help keep our city and parish safe. And this issue is gaining in importance every day as the more dangerous Delta variant spreads further and the growth of vaccinations in Lafayette Parish stagnates.
Officials in Maricopa County, Ariz., allocated $136 million of their $435 million windfall to set up two new health clinics for providing vaccines. Only about 33% of Lafayette Parish residents have been fully vaccinated.
After early success propping up drive-thru testing sites, LCG has taken a more hands-off approach to the public health response. So while this money creates the potential for LCG to take a more proactive stance in protecting public health, it’s up to the councils to determine just how seriously they want to take the ongoing pandemic.
Addressing negative economic impacts
This is another very broad category of eligible expenses — everything from helping the unemployed and financially insecure to supporting small businesses to speeding the recovery of the tourism and hospitality industries to rehiring government employees who were laid off because of the pandemic.
Many communities are using the funds to do just that. El Paso County, Texas, set aside $20 million of its $140 million allocation to small business recovery and workforce development, the largest share.
Guillory’s first attempt at diverting federal funding to help small businesses is a cautionary tale. More than a year after the money was appropriated, it still hasn’t all been deployed; moving relief money quickly has been a challenge in general for other areas, too, like rent assistance. But there could be opportunities to help businesses by focusing on workforce development initiatives like job training, in particular retraining our oil and gas workforce for positions in renewable energy, IT, healthcare and other local growth fields.
The City Council could also use some of its money to rehire parks and culture staff who were let go last year and cover their salaries for the next few years. Either council could decide to invest some of that money into local cultural assets that help drive tourism, like Festival International and the Acadiana Center for the Arts. They could also use it to make much-needed improvements to public infrastructure that supports culture, like the stage at Parc International. Or do something big, like repurposing a building Downtown into a cultural museum and cooking school. Again, there are lots of opportunities available to make a difference.
Another related option is providing premium pay for essential workers — like nurses, farmers, cashiers, janitors, truck drivers, teachers — either directly or as grants to employers. Or LCG could spend more money helping the unemployed and financially insecure with any sort of direct assistance again. Both of these options, however, risk burning through this money quickly.
Serving the hardest hit communities
If either council wants to, there are few limits on what they could do to help the less fortunate and most vulnerable in our community — from addressing health disparities to making investments in housing and homeless services to addressing educational disparities to an array of childcare services.
Providence, R.I., for instance, invested just under $4 million in youth programs and another $2.6 million in anti-violence programs.
The only real limits are that these services need to be provided to families living within census tracts that are designated as low income by the Department of Housing and Urban Development, which encompasses almost 40,000 people in Lafayette, most of whom live around the Evangeline Thruway. Or this money can serve other populations that were disproportionately impacted by the pandemic.
Austin, Texas, which has dealt with a big housing and homelessness crisis, is setting aside $100 million for programs to address homelessness. Many communities are funding nonprofits at smaller scales, too.
Historically, LCG has not made these types of services a priority when it comes to spending federal funding like community development block grants. But there are clear needs that either council should consider addressing. For example, they could fund a new homeless shelter to address the fact that Lafayette has lost 170 shelter beds while the number of homeless people has roughly doubled. Or they could fund community impact teams that coordinate public and private sector resources to help get homeless people off the streets.
Investing in water and sewer infrastructure
This one’s pretty straightforward, as money can be used for drinking water or wastewater infrastructure projects. The city council of Bozeman, Mont., has proposed prioritizing its ARPA funds for sewer and water upgrades.
For Lafayette, stormwater projects are deemed eligible, meaning this money can be used for flood management, like the millions appropriated recently by the City and Parish councils. It may also be used to help improve the availability of water to aid firefighting efforts in unincorporated Lafayette, which has been identified as an issue in the last fire insurance ratings report.
For the city, this money could be used to offset spending in the capital outlay budget for drainage. And it may also be able to help offset the costs that LUS has been facing in upgrading some of its water infrastructure without having to raise rates, an issue that gained importance a few years ago when the EPA identified Clean Water Act violations at LUS.
Investing in broadband infrastructure
I’d love to use this money to expand LUS Fiber, but since the investments in broadband have to be focused on those who are currently unserved or underserved, which means lacking a wireline broadband connection that reliably delivers a minimum of 25Mbps down and 3Mbps up, I doubt there’s anyone who would qualify in the city. It’s also likely there aren’t many properties in the parish that can’t get 25/3 from Cox, AT&T or LUS Fiber.
The other subcategory of eligible expenses is to either subsidize broadband service for low-income households or spend money to promote digital literacy and bridge the digital divide. The pandemic has shown how important it is to get everyone online and comfortable using the internet as it makes our community much more resilient when faced with a crisis like a pandemic.
Replacing lost public sector revenue
Technically, money doesn’t have to be “lost” to be reimbursed, according to the interim rules. Funds can be used to make up for slow growth, too, based on the national average growth rate of 4.1%. So even though the city’s and parish’s revenue didn’t go down in 2020, Lafayette governments can reimburse revenues to levels projected had they grown by 4.1% since 2019.
This is money that can just go directly into the city and parish’s general fund balances without any other strings attached.
The City of San Antonio, which received a massive ARPA haul, is using a lot of it to restore cuts made because of lost tourism revenue.
Assuming the final rules allow all forms of revenue to be included in this calculation, it would mean the parish can put almost $3 million into its undedicated general fund balance, and the city more than $20 million. That’s money that can be spent even on non-eligible expenses like roads.
Let’s not screw this up, Lafayette!
There are lots of legitimate ways that this money could be spent to better our community. Which is why I believe it’s so important that we get the public involved, to make sure that this money is spent in ways that reflect the priorities of our community.
Many governments across the country have been proactive in soliciting ideas from the public. The city of Detroit made a direct public ask and used that input to prioritize rebuilding neighborhoods, fight poverty and improve public safety. Smaller communities have taken this approach as well. Locally, there is no talk yet coming from LCG about its plans or efforts to garner feedback from the public, and the budget process is right around the corner.
Just because we’ve elected politicians and given them the power to make decisions doesn’t mean we should sit back and let them decide what our priorities are without ongoing input from our community. That’s why if you have an opinion about what our priorities should be for spending this money, you should make your voice heard. You can do so by filling out this survey or by contacting your elected officials directly.
This money could very well represent a one-shot opportunity to come together and make sure our community’s priorities are represented, however it ultimately gets spent.