State officials baffled as hundreds of local governments rebuff new federal pandemic funds

It’s like winning the lottery and tearing up the winning ticket. At least that’s how state officials must view the indifference of hundreds of local governments to the latest federally-funded pandemic giveaway known as the American Rescue Plan, Round 2.

The apparent willingness of townships and cities to leave millions of dollars of “free money” on the table so concerns state bureaucrats in charge of doling it out that they extended the deadline for applying for the windfall at the last minute, according to the Star Tribune.

Hundreds of communities across Minnesota were poised to lose out on significant sums Monday — until state officials opted to give them another week to request federal aid.

The deadline for smaller local governments to ask for American Rescue Plan Act dollars was slated for Monday. But on the cutoff date, 568 eligible townships and 113 cities had not yet sought the dollars they are eligible for, according to Minnesota Management and Budget (MMB) officials. The municipalities would have left behind $18 million in federal funds that could be spent on improving their water systems, expanding broadband access, covering revenue lost during the COVID-19 pandemic and other needs.

Yet some elected officials at the smallest level of government, townships, evidently see the federal giveaway as over the top and wasteful. Others want nothing to do with the paperwork and potential liabilities new projects built with federal funds would obligate their taxpayers for down the road.

Nevertheless, the commissioner in charge of handing out the federal largesse continues to plead with local governments to change their minds in time to cash in by the new deadline.

The state, which set the Monday deadline, made a last-minute extension, giving communities until Oct. 11 to submit their requests.

“These ARP funds are a huge opportunity for local governments to address inequities and negative economic impacts in their communities and improve access to water and broadband infrastructure,” MMB Commissioner Jim Schowalter said in a statement. “We urge every city and town in the state to request these funds, and we hope this extended deadline will help make that happen.”

To their credit, this isn’t the first time Minnesota townships and some cities have refused to fall in line in applying for federal freebies flowing out of the pandemic.

But Minnesota has struggled to get those small communities to submit their requests compared to some other states, like Wisconsin, where nearly all of the eligible towns have applied for their chunk of the cash.

If a township or city is not responsive or declines the funds, a U.S. Department of the Treasury official said the default situation is to redistribute the money to local governments in the state that did request the dollars. A community can also choose to transfer their money to the state, according to the U.S. Treasury.

The pace of applications for the ARP funds has picked up. It’s hard to blame residents of the smallest and leanest level of government for claiming what’s coming to them. Yet it’s good to know that some citizens and their elected representatives still refuse to buy into the program, no matter how hard bureaucrats in D.C. and St. Paul twist their arms.