Spending America Rescue Plan Act (ARPA) Funds on Economic Development

It has been more than a year since American Rescue Plan Act (ARPA) funds were allocated to local governments, yet many of those dollars have gone unspent. Immediate uses for some of the ARPA dollars were obvious such as replacing lost tax revenues for governments, one-time grants for businesses, and addressing public health needs due to the pandemic. However, many communities were left with significant amounts of money left over and no obvious way to spend it.

The two most common reasons people have unallocated ARPA funds are:

1.    Uneasiness with exactly what the additional ARPA funds can be used for, and not wanting to get in trouble for spending it incorrectly.

2.    A desire to gather a lot of community leaders, organizations, and stakeholders together to carefully plan where these dollars should be spent.

Both of these reasons have left leaders saying, “Let’s see what others do first” and a lot of paralysis-by-analysis.

For those communities with unspent ARPA funds and economic development leaders that would like these dollars to enable economic development initiatives there is a best practice every community can use for only a tiny fraction of their ARPA dollars to make a lasting economic impact for their communities.

These days it's hard to find a consensus on anything. In fact, I can only thing of two off the top of my head: 1) This summer's Top Gun move was amazing and 2) Small businesses got crushed by the pandemic and continue to need help. You can’t spend ARPA money going to the theater to see Top Gun, so I’ll focus on small business.

The primary way that governments helped small businesses with ARPA funds was by cutting them a check. While this was good in the moment of acute crisis, it makes me think of the proverb: “Give a man a fish and he’ll eat for a day; teach a man to fish and he’ll eat for a lifetime.” So, how have communities allocated ARPA funds to small businesses in a way that will both help them now and into the future? For the answer, all economic developers need to do is start by looking news articles about what Salem, Ohio has done.

 Salem, Ohio realized that ARPA funds would be an excellent use for supporting their small businesses and entrepreneurs need for information and insights to better start, operate, and grow. The program is now freely available to help every business in Salem and is available for small businesses to help themselves on the SOD Center website. In reference to SizeUp, Salem Mayor John Berlin said “In today’s information economy, if you don’t have access to information your business is at a significant disadvantage. With the launch of SizeUp we are empowering our small businesses in Salem to make more data driven decisions to better operate, succeed, and grow”.

The Town of Windsor, Colorado used their first round of ARPA funds on some of the more common uses earlier described, but realized during the second round that they needed something that would have a lasting impact for small businesses and implementing SizeUp emerged as an obvious choice.

Now that other communities have led the way to show SizeUp is an acceptable and smart use of ARPA funds, you can confidently proceed with this strategy for supporting small businesses in your community also. SizeUp can be implemented as a digital small business assistance program in any and every community in the United States. Visit the SizeUp website today to learn more about how this solution can be implemented in your community and to schedule your demo!