What happened: ARTBA led a group of 35 national organizations calling on U.S. Treasury Secretary Janet Yellen to provide clear guidance and flexibility in how states and local governments can spend $360 billion in relief from the American Rescue Plan (ARP). The $1.9 trillion COVID-19 relief package signed into law March 11 includes the money to address budget shortfalls. ARP does not specify whether state and local governments can spend the aid on transportation projects delayed or cancelled due to pandemic-related budget shortfalls. The law does suggest the funding could be used for any project negatively impacted by the pandemic.

Why it matters: Giving state and local governments the flexibility to help make up for losses and get projects back on track will be important in the months and years ahead. At least $12 billion in state and local transportation projects have been delayed or cancelled. State transportation departments project another $18 billion in losses.

More background: U.S. Secretary of Transportation Pete Buttigieg testified before the House Transportation & Infrastructure Committee that state and local funding in ARP “has some flexibility in it that I do think can be used to support to a significant degree those road budgets that have been impacted.” The ARP instructs Yellen to issue funding to the state and local governments within 60 days of enactment of the law, though the guidance on how the state and local funds can be spent could take longer.

Key document: March 28 letter to Treasury Secretary Yellen.