Wisconsin Policy Forum releases report on how Wisconsin pandemic relief aid compares to other states
Wisconsin got $4.86 billion in fiscal recover funds under the American Rescue Plan Act that was approved in March of last year.
A little more than $2.5 billion of that went to the state, while the rest went to local governments.
A Wisconsin Policy Forum report has broken down how the state has used ARPA and CARES Act over the last two years.
$2.5 billion dollars can go along way especially when coupled with the $2 billion Wisconsin got from the CARES Act.
Governor Evers Administration, which controls how the funds are spent, has spent or obligated about $2.77 billion of the total aid, or about 60.4% of it.
Majority of it has gone to public health and the pandemic response. Another large chunk has gone to small businesses and non-profits.
This differs from how a lot of other states have been using the funds, according to Jason Stein, Research Director for the Wisconsin Policy Forum and author of its latest report on pandemic aid spending.
He says while Evers Administration has focused on economic development, many other states have been using it cover budget gaps caused by lost revenue during the pandemic.
Wisconsin’s tax revenue has been strong, and the surplus continues to grow.
“There’s not been any pressure on state officials in Wisconsin to use that ARPA money, just to sort of prop up the state budget. I think that’s one reason why the state has been able to prioritize assistance to private-sector organizations,” said Stein.
Stein says because of this, Wisconsin will be better positioned to continue to avoid use the one-time ARPA funds to plug budget shortfalls.
Though, depending on how small businesses or non-profits have used the funds, they may be running into that problem in the future.
“To the extent that they use those funds to many make a capital investment, to buy new equipment, or get training for staff or do other things, buy software that might allow them to be more productive, they may be able to really leverage this aid to have stronger results, greater productivity going forward,” said Stein.
The nearly $4.86 billion Wisconsin received Under the American Rescue Plan Act equates to 8.7 percent of annual state and local spending.
While that’s a lot of money, it’s a smaller portion than what many other states have received.
In fact, Wisconsin falls into bottom 10 states when it comes to receiving federal aid according the Wisconsin Policy Forum report.
Stein says there’s two reasons for this.
One, every state receiving $500 million dollars. This means Wisconsin got less per capita than states with lower populations.
Two, the other part of ARPA funding was dependent on the state’s unemployment rate during the last quarter of 2020.
Stein says Wisconsin typically has a lower unemployment rate than the national average and that held true during that time frame.
“It’s certainly not all bad that we didn’t receive as much as some states, right? To have higher unemployment and get a higher ARPA payment wouldn’t necessarily be a good trade off,” said Stein.
The Wisconsin Policy Forum says as of December 31st, the state still had roughly $1.8 billion in ARPA funds that had yet to be spent or obligated. Though most has been allocated for a specific purpose since January.
States have until 2026 to the to spend the federal pandemic relief aid.