WASHINGTON – Buffalo and other municipalities across the eight-county Western New York region will soon be able to start cashing in on at least $822.7 million in federal aid included in President Biden's American Rescue Plan – but doing so won't be as easy as taking money out of a bank account.
Biden administration officials Monday outlined how local officials can – and can't – use the federal money. The rules give local governments wide latitude in using the money to respond to the Covid-19 pandemic and fill the budget holes that it prompted. They can also use the money to provide premium pay to essential workers; set up programs to help local businesses and individuals; address systemic inequities in local economies and health systems; and pay for water, sewer and broadband projects.
But local governments can't use the new federal aid to cut local taxes or prop up pension funds. And they will have to justify every expenditure before the Department of the Treasury will send them the money.
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On a conference call with reporters, Biden administration officials stressed that the $350 billion in state, local and tribal aid nationwide is intended to jump-start the economy as the pandemic abates.
"This is ensuring that those state and local governments are able to not just bounce back, not just build back, but – as somebody I know says – build back better and build back quickly," said Gene Sperling, the White House American Rescue Plan coordinator.
"Build Back Better" was Biden's campaign slogan last year, and has also served as the president's slogan for his coronavirus recovery efforts.
The $822.7 million targeted for Western New York is actually a lowball estimate. While it includes aid to major municipalities such as Buffalo, its largest suburbs and the eight counties in the region, millions more will be distributed to the state, which will then parcel it out to smaller municipalities. Indian tribes will be eligible for funding, too, although the amounts have not yet been detailed. Meanwhile, the New York State government will be eligible for $12.74 billion for its own uses.
Buffalo will be eligible for up to $331.4 million in federal aid, by far the largest amount locally, but less than the $350 million an earlier House estimate showed the city getting. Similarly, Niagara Falls will be eligible for up to $57.2 million – $2.3 million less than the earlier estimate.
Some other local municipalities, such as the towns of Hamburg and West Seneca, are in line for slightly more than the earlier estimates had indicated.
The Department of the Treasury made its calculations of federal aid based on the formula included in the final version of the bill that Congress passed. Rep. Brian Higgins, a Buffalo Democrat, said he would be looking into why the Treasury Department aid calculations changed from what House staffers originally estimated.
"I'm going to try to figure out how the discrepancy occurred to see if I can maximize the amount of money the city of Buffalo can get, the amount of money the city of Niagara Falls can get," Higgins said.
Federal officials made clear that they are not providing local and state governments with lump sum payments of all the money they have been allocated. Instead, starting today, municipalities can make requests for funding through an online portal set up by the Department of the Treasury.
Local officials will have to specify what the money will be used for, and once Treasury officials approve that use, the federal aid should be flowing to municipalities within a matter of days, senior administration officials said.
Higgins said that while localities will have some latitude in terms of how they spend their federal aid, "there are guardrails to ensure that it hits the areas of the economy in the localities throughout the nation who have been hit hardest."
Senate Majority Leader Charles E. Schumer, a New York Democrat who pushed the American Rescue Plan through the Senate, indicated that he's happy with how the Biden administration is handling the state and local aid.
“After fighting this pandemic on the front lines, state and local governments in New York and across the country were loud and clear: they needed help and they needed it quickly to keep front-line workers on the job and prevent brutal service cuts," Schumer said. "With the Treasury Department’s announcement today, we can say: help is on the way."
Buffalo-area officials who have detailed how they want to use the federal funds have so far outlined proposals that would appear to qualify for the money. Buffalo Mayor Byron W. Brown, for example, has proposed using $50.4 million in stimulus funds to cover revenue shortfalls and increased costs tied to the pandemic. And Erie County Executive Mark C. Poloncarz has discussed using federal funds to expand broadband internet access throughout the county, which is one of the federal aid program's allowable infrastructure investments.
The local and state aid was included in Biden's $1.9 trillion American Rescue Plan, which Congress approved in March. Biden was adamant about including state and local aid in that measure, and Treasury Secretary Janet Yellen said it was because administration officials knew that the Obama administration did not do enough to help those governments in the stimulus measure it pushed through Congress in 2009.
"Insufficient relief meant that cities had to slash spending, and that austerity undermined the broader recovery," Yellen said. "With today’s announcement, we are charting a very different – and much faster – course back to prosperity.”
The Biden administration's aid details were notable because they provided more specifics than had been available to date regarding how much money each municipality would receive.
Major municipalities in the eight-county Western New York region would be eligible to receive the following amounts of aid:
• Buffalo: $331.4 million
• Niagara Falls: $57.2 million
• Town of Tonawanda: $40.4 million
• Jamestown: $28.1 million
• Cheektowaga: $25.3 million
• Amherst: $15.2 million
• Town of Hamburg: $11.5 million
• Dunkirk: $10.9 million
• West Seneca: $8.5 million
Meanwhile, Western New York counties would be eligible for the following amounts of money:
• Erie County: $178.4 million
• Niagara County: $40.7 million
• Chautauqua County: $24.6 million
• Cattaraugus County: $14.8 million
• Genesee County: $11.1 million
• Allegany County: $9 million
• Orleans County: $7.8 million
• Wyoming County: $7.7 million
