New Hampshire executes plans for federal relief funds while still angling for right to cut taxes
(The Center Square) – New Hampshire will add nearly $1 billion to the state coffers due from the American Rescue Plan Act, or ARPA, and state lawmakers have already determined how much of it will be spent.
The $994.5 million allotted to the state budget amounts to 14.1% of the state’s $7.1 billion expenditures, including money spent from federal funds and bonds, during fiscal 2020, according to Pew Charitable Trusts. The majority of U.S. states, 37 of them, received just between 5% and 10% of their previous year’s total spending.
Each state and the District of Columbia was given a portion of the $195 billion set aside in the $1.9 trillion American Rescue Plan Act based on how many workers in their states were unemployed in 2020. An additional $500 million was given to each state as well.
States have strict rules as to how they can spend the money. According to the U.S. Treasury Department, the ARPA funds could be used to support COVID-19 response and cover losses states incurred because of the pandemic. States could also allocate the money to support households and businesses and address other challenges brought on by the pandemic.
A New Hampshire state committee agreed in June to use $160 million of the funding for several projects that include:
• A statewide water project
• Mental health services
• Purchases of computer hardware and software and cybersecurity protections
• State property maintenance
• State recreation projects
• Funding for prosecuting abuse cases
States cannot spend the money to reduce taxes. New Hampshire is one of several states suing the federal government over this provision.
In early July, an Ohio judge ruled in favor of the state, saying the Biden administration did not have the authority to stop Ohio from using the funds for tax cuts. Gov. Mike DeWine signed the 2021 budget shortly after the ruling was announced that includes a reduction in income taxes using the ARPA funds. The other lawsuits are pending.
New Hampshire and other states have until 2024 to determine how they will spend their share of the money. All of the money must be spent by Dec. 31, 2026.
Other states have also decided how they will spend a portion of their ARPA funds. New Jersey lawmakers agreed to spend $600 million of its $6.2 billion allocation on special education and another $400 million for trauma centers, according to information from the National Conference of State Legislatures. Pennsylvania lawmakers and Gov. Tom Wolf agreed to save the majority of their state’s allocation.
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