As Deadline Looms, County Should Shift Stimulus Funding

Milwaukee County Courthouse. Photo by Graham Kilmer.

Milwaukee County policymakers may find themselves playing musical chairs in 2024 with millions in federal funding.

Milwaukee County has allocated almost all of the $184 million grant it received through the American Rescue Plan Act (ARPA) to specific projects, but it hasn’t begun to spend more than 50% of the funds. Local governments must spend or commit these funds to specific projects by the end of 2024 or else return them to the federal government.

The county has given departments a deadline to commit these funds by the end of the first quarter of 2024. If the funds are not committed, they will be pulled and moved elsewhere in the county.

The county received a $183.7 million allocation through ARPA and all but $200,000 has been allocated. As of October, county departments still had $98.2 million that had not yet been committed, though its general purpose was planned.

An ARPA commitment can also be described as an encumbrance. An allocation puts money in a fund for a project, while an encumbrance is a commitment to spend those dollars on a specific expense.

The American Rescue Plan Act is a $1.9 trillion stimulus bill passed in 2021 in response to the COVID-19 pandemic. The county has, for the most part, used the funds for one-time expenses, like infrastructure projects. ARPA has funded dozens of projects and policy priorities that would have been unthinkable without the stimulus funding.

The county has invested millions of ARPA dollars into affordable housing projects, mental health programs, healthcare, the development of a new human services building, county parks, youth behavioral intervention, foreclosure rehabilitation and the new Forensic Science Center, among many other government projects.

Ashley Adsit, director of project and performance management, told the county’s ARPA Task Force Thursday that her office surveyed project managers through county government and asked them to identify challenges or resources they need to begin to commit their ARPA funding.

Many projects are on the brink of finalizing contracts, Adsit said, but they are digging into the responses from across the county and keeping an eye on the progress of projects.

“Because we want to encourage program leaders at this point,” Adsit said. “We’re not trying to be optimistic, we want to be very realistic with where we are in terms of spending and implementation.”

For some projects that cannot meet the timeline set by the U.S. Treasury, the county may need to swap out the federal funding for property tax dollars.

Once encumbered, the funds must be spent by the end of 2026.

The City of Milwaukee, which received a $394.2 million ARPA grant, allocated the first half of its funds in late 2021 and has used much of the second half to replace “lost revenue” as the bill allows.