States and Cities Have Big Plans for Their Federal Windfall

In state capitols and city halls across the U.S., local officials are drawing up ambitious plans on how to spend the $350 billion in federal aid they’re receiving under the American Rescue Plan.

Their most urgent need is using the funds to address the impact of Covid-19, provide relief to people and businesses and address their own financial straits caused by the pandemic. But with tax revenue largely recovering and the economy reopening, states are able to go beyond covering deficits and direct Covid response, and use the funds to address broader problems exacerbated by the pandemic.