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State to require local matches to fund projects with ARPA money

by Ryan Pivoney | December 22, 2021 at 4:00 a.m.

The state will be looking for "significant" local matches in deciding how to use federal COVID-19 relief dollars.

Missouri's use of American Rescue Plan Act funds will largely depend on how much local communities can match the investment with their own ARPA funds, regular city and county funds or with grants, Missouri Department of Economic Development officials said.

On Monday, DED provided an update as to how the state plans to spend some ARPA funds to promote economic development. The presentation was geared toward local governments and provided insight into how appropriations could be combined to accomplish state or local goals.

"I want to make sure folks take away the fact that many of the state's programs that are going to be proposed during the State of the State and that the Governor's Office is going to prioritize are going to require a strong local match," DED Acting Director Maggie Kost said.

ARPA, signed into law by President Joe Biden in March, is a $1.9 trillion spending package meant to provide communities assistance in recovering from the pandemic. In addition to state governments getting funding, local city and county governments were also appropriated money.

Missouri received a total of $2.6 billion in ARPA funds, including state, city and county appropriations.

ARPA funding is limited in what it can be spent on by the bill itself.

Gov. Mike Parson has been working with state agencies to identify and prioritize potential uses for the money, and his administration has released guides for how city and county governments can spend their allocations.

Kost said regional and local officials planning how to use their funds should be aware the state will have matching requirements for many of its investments.

"Our expectation is that there will be a significant level of match," said Shad Burner, DED director of federal initiatives. "Could be in the 50 percent range, and there could be opportunities for less, but we're still driving down that path."

Burner said the state won't care so much about where the matching funds come from -- it could be city or county ARPA dollars, local funds or grants -- but that there is a local investment.

By matching funds, Kost said local and state economic development projects are more likely to become a reality, noting there are some projects that have been around for awhile but the state hasn't had the resources to complete.

"The focus here is on partnering with our local communities to make sure that we can make some of those investments happen that we've wanted to do for a long time," Kost said.

Specific projects will be chosen later, but eligibility requirements, funding match requirements, application forms and project timelines will be developed in the spring, Burner said.

Kost said the state is also considering a sliding scale for match requirements, which would assist some communities who have projects they want to accomplish but don't have sole discretion over ARPA funds.

"We know that some communities are not going to have access to their own ARPA funding, and we want to make sure that we're still able to get some things done in those communities. So it'll probably be a sliding-type scale and certainly more to come on that as we build out the programs," Kost said.

An area where this cooperation might play out is in broadband development.

Parson has committed $400 million to increasing access to internet around the state, as well as some funding to improve the state's water infrastructure, and is announcing more specific plans for funds in his 2022 State of the State Address next month.

The state has selected a new broadband director, who will begin in January. The previous director, Tim Arbeiter, announced in November he was leaving the state for a job in the private sector.

Currently, the state is looking to invest in expanding internet infrastructure, helping Missourians get connected and getting technical support.

Paul Eisenstein, DED director of federal initiatives, said projects centered around establishing broadband infrastructure in unserved and underserved communities are anticipated for the infrastructure piece and could benefit from local investments.

"You also may see some efforts around cell phone towers, especially in areas where fiber to the home isn't an option," Eisenstein said. "There might be an opportunity to build or retro-fit cell towers on public land so that no matter where you are if you're a Missourian, where you work and where you live you have access to high quality internet."

These are still preliminary plans, however, Eisenstein noted.

In addition to broadband, water and wastewater infrastructure, workforce development, tourism, site development, community development and support for small businesses and nonprofits were other key economic development priorities Parson and his cabinet have picked out for potential ARPA funding, Kost said.

Part of ARPA also designated $3 billion to the U.S. Economic Development Administration to dole out as competitive and noncompetitive grants to states.

Missouri will use some of those grants to make a $3 million investment in bolstering tourism and invest $2.7 million in the Rock Island State Trail being developed.

The state is also looking at getting $56 million to support entrepreneurs, including $4 million for small businesses with 10 employees or fewer. It will get an additional $25 million to support socially and economically disadvantaged business owners and areas.

State ARPA funds will go through the regular budget process in the General Assembly at the start of the session, but won't become available until July 1, 2022. All funds must be allocated by the end of 2024 and spent by the end of 2026.

Print Headline: State to require local matches for ARPA-funded projects


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