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Federal funds must be spent with care

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Gov. Asa Hutchinson announced this week that he has, by executive order, established the American Rescue Plan Steering Committee.
The committee is comprised of eight state cabinet officials or their designees, as well as three state senators and three state representatives chosen by leaders of their chambers.
The committee will guide an executive/legislative effort to manage funding from the federal American Rescue Plan, the governor said.
Under the plan, Hutchinson said, some $5 billion is scheduled to come into Arkansas in various forms. It is slated to go to educational institutions, cities, counties and the Department of Human Services for rental or other humanitarian assistance.
The state is set to receive about $1.57 billion, which the governor called “a unique moment in history.”
Hutchinson said he read through guidelines from the U.S. Treasury released this week regarding how the money can be spent.
“The purposes are very broad,” he said. “There’s a lot of flexibility.”
The money can be used for capital investments and infrastructure, even to help the state Health Department prepare for a future pandemic.
“This is such a unique time that it’s important that we proceed through this in a planned fashion, that we proceed through it in a coordinated way in coordination with our county and city counterparts that receive separate funds and that we coordinate with our different agencies in education that receive separate American Rescue Plan funds,” Hutchinson said.
Entities must also be methodical about using the money and not rushed, the governor said.
Hutchinson said the state will receive half of promised funding in the near future. Some states whose economies have not recovered as quickly as Arkansas’ are receiving all funding at once. The remainder will be received within the next couple of years.
Another part of the governor’s mandate is that the community be engaged in the effort. To that end, the executive order mandates using private sector advisory committees and working groups as needed to develop investment plans.
His recommendation is that ARP money be spent on capital investments like broadband that won’t incur long-term spending and debt for the state as opposed to developing new programs.
“When the federal money runs out, we don’t have any state money to supplement it,” he said.



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