Flexible Aid in an Uncertain World: The Coronavirus State and Local Fiscal Recovery Funds Program

• Author: Philip Rocco,Amanda Kass
• DOI: http://doi.org/10.1177/0160323X221101005
• Published date: 01 December 2022
• Date: 01 December 2022
• Subject Matter: Field Notes

https://doi.org/10.1177/0160323X221101005

State and Local Government Review

2022, Vol. 54(4) 346 –361

© The Author(s) 2022

Article reuse guidelines:

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DOI: 10.1177/0160323X221101005

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Field Notes

1137322SLGXXX10.1177/0160323X221101005State and Local Government ReviewRocco and Kass

research-article2022

Flexible Aid in an Uncertain

World: The Coronavirus

State and Local Fiscal

Recovery Funds Program

Philip Rocco

1

and Amanda Kass

2

Abstract

Emergency f‌iscal transfers to state, local, tribal, and territorial governments have been at the core of

the U.S. federal government’s response to the COVID-19 pandemic. The most extensive of these

transfer programs is the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program,

contained in the American Rescue Plan Act of 2021. The CSLFRF is not only larger than prior

rounds of emergency aid, it was also designed to address a broader series of crises, address pre-

existing inequities, and provide greater discretion to public off‌icials in deciding how to allocate

funds. In this article, we consider the extent to which this program represents a departure from

what some have called “fend for yourself”federalism. We conclude that while the coordinated

effort of intergovernmental organizations resulted in a greater measure of federal f‌iscal activism

and f‌lexibility than might have been anticipated, lingering political conf‌licts and legacies of austerity

will continue to inf‌lect the CSLFRF’s implementation.

Keywords

COVID-19, american recovery plan act, coronavirus state and local f‌iscal relief fund,

intergovernmental aid, f‌iscal federalism

Introduction

At the beginning of the COVID-19 pandemic,

state and local governments were universally rec-

ognized as constituting the “front lines”in emer-

gency response. Not only did these jurisdictions

possess most of the critical regulatory authority

necessary to prevent the spread of the disease,

they also performed a signif‌icant amount of the

work associated with economic and social

service provision necessary to sustain residents

as the economic fallout of the crisis ensued. At

the outset of the pandemic, however, the crucial

question was whether the federal government––

to extend the metaphor––would provide suff‌i-

cient reinforcements.

In a political context def‌ined by intense par-

tisan polarization and years of federal f‌iscal

austerity—characteristic of what some have

called “fend for yourself”federalism––it was

not unreasonable to expect an anemic federal

1

Department of Political Science, Marquette University,

Milwaukee, WI, USA

2

Government Finance Research Center, University of

Illinois, Chicago, Chicago, IL, USA

Corresponding Author:

Philip Rocco, Marquette University,Department of Political

Science, Wehr Physics Building, Room 468, 1420 W.

Clybourn St., Milwaukee, WI 53233, USA.

Email: philip.rocco@marquette.edu

Rocco and Kass 347

response to the pandemic (Conlan et al. 2015;

Benton 2018; Benton 2020). Further, given the

absence of strong institutional venues for

joint-decision-making across multiple levels

of government, the demands of state and

local off‌icials might have seemed easy to mar-

ginalize (Rocco, Béland and Waddan 2020).

These fears were compounded by the uniquely

haphazard and transactional response of the

Trump administration (Bowling et al. 2020).

These dynamics no doubt contributed to delay

and confusion in the delivery of federal aid, espe-

cially during the pivotal early months of the crisis

(Lopez-Santana and Rocco 2021). Yet, as we

argue in this Field Notes essay, the crafting and

implementation of federal aid to state, local,

tribal, and territorial governments in the 2021

American Rescue Plan Act (ARPA) stands in

stark contrast to early expectations. As the dark

line in Figure 1 shows, when it comes to

federal aid delivered to state and local

governments, there was no quantitative analogue

to the ARPA during the Great Recession.

And whereas prior rounds of aid during

COVID-19 were often beset by tight restrictions,

the most signif‌icant component of ARPA aid to

state, local tribal, and territorial governments––

the $350 billion Coronavirus State and Local

Fiscal Recovery Funds (CSLFRF) program––

allowed off‌icials an exceptional amount of f‌lexi-

bility in how they allocated these dollars.

1

The design and implementation of the

CSLFRF was not obvious at the outset.

Rather, we argue, both the legislative text and

the f‌inal regulations governing the program

ref‌lect a robust lobbying effort coordinated

across members of the “Big 7”intergovernmen-

tal organizations to emphasize that inadequate

aid to state and local governments had pro-

longed the Great Recession and that inf‌lexibly

designed aid programs had impeded state and

local responses earlier in the pandemic.

2

In the

Figure 1. Federal grants-in-aid and state-local personal income and sales tax revenues net of nonfederal

transfers, 2007–2021 ($Billions FY 2020)

Source: U.S. Bureau of Economic Analysis (2021)

Note: Figure based on Lopez-Santana and Rocco (2021)

2State and Local Government Review 0(0)