The American Rescue Plan Act of 2021 included $350 billion in state and local recovery funds, including about $133 million for Hamilton County and its municipalities.
Local governments receiving allocations of less than $10 million can use the funds for almost any government services and projects aside from rainy day funds, debt payments and “extraordinary” pension contributions, according to the U.S. Treasury’s final rule for state and local recovery funds.
Counties and metropolitan cities like Chattanooga receive recovery fund payments directly from the U.S. Treasury, which requires them to submit reports on how the funds are spent.
Smaller governments, generally those serving populations of less than 50,000, receive the federal funds in payments from the state in amounts based on their populations and aren’t subject to the same reporting requirements.
The smaller governments in Hamilton County are set to receive about $23 million in recovery funds distributed in two equal tranches about 12 months apart, with the first distributed around October 2021 and the second expected to come around the same time this year.