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Proposed uses for NC’s flexible funds from American Rescue Plan vary widely

North Carolina’s share of State Fiscal Recovery Funds – flexible dollars allocated to North Carolina from the American Rescue Plan – present the opportunity to address new and long-standing needs across the state by infusing dollars at a once-in-a-generation scale into communities.

Our analysis to date shows that the state House and Senate’s proposed plans lack transparency and public input, rely on arbitrary one-time allocations for specific communities only, and demonstrate an over-reliance on federal funds rather than state funds to address long-term needs.

An additional analysis of the three plans – those released by the Governor, Senate, and House, respectively – shows substantial variation across the proposals. Line items were placed into one of five categories related to the purpose or outcome the investment sought to secure. These were:

  • Aid for individuals, examples include premium pay bonuses and funding for food banks
  • Build capital and infrastructure, including broadband networks and water and sewer utility grants
  • Support the workforce, examples include Longleaf Commitment grants and funding to expand an apprenticeship program for high-demand fields
  • Stabilize private businesses across North Carolina, including through a grant program to aid in their economic recovery from the pandemic
  • Fund public institutions, such as stabilizing community college budgets, funding for communicable disease control and prevention by public health departments, and supports for local governments to administer federal recovery funds.

All three proposals place a high priority on improving the state’s infrastructure, though vary in how they intend to do so. In addition to infrastructure investments, the Governor’s plan prioritizes aid to individuals, while the Senate’s places the next greatest investments to stabilize businesses, and the House proposes similar levels of funding for aid to individuals, mostly in the form of one-time premium pay bonuses and stabilizing businesses. Notably, the legislative plans would invest very few dollars into supporting the workforce, and all three plans invest relatively few dollars into funding for public institutions.

 

Suzy Khachaturyan is a Policy Analyst at the Budget & Tax Center, a project of the NC Justice Center.

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