The $1.9 trillion American Rescue Plan Act of 2021, passed by U.S. Congress Wednesday and heading to the desk of President Joe Biden, will bring billions of stimulus dollars into Montana under the auspices of a wide-ranging effort to pull the national economy out of a COVID-19 pandemic slump.
In addition to another round of individual stimulus checks set at $1,400 for most taxpayers, the act includes provisions intended to cover the costs of COVID-19 vaccination programs. According to a March 8 analysis by the governor’s Office of Budget & Program Planning, it will also pass an estimated $2.7 billion in relief money to Montana’s state and local governments — more than the annual amount spent from the state’s General Fund budget.
That Montana total includes an estimated $382 million for K-12 education, $286 million to extend pandemic unemployment benefits, $152 million for emergency rental assistance and $143 million for COVID-19 testing and contract tracing. It also includes $298 million in budget relief to towns, cities and tribal governments, as well as $910 million to account for the pandemic’s impact on the state budget.
Like last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $1.7 trillion COVID-19 relief package signed into law by President Donald Trump, ARPA will be largely financed by deficit spending. An analysis by the Congressional Budget Office estimates the measure will add $1.9 trillion to the national debt over the next decade.
Because Montana’s state government went into the pandemic with ample state budget reserves and forecasts a sharp economic rebound, the lawmakers who are crafting the state’s 2022-23 budget haven’t been expecting a fiscal crunch despite the pandemic’s widespread economic fallout.
As such, the new COVID relief money earmarked for state-level assistance won’t so much patch up holes in the state budget as give Montana’s Republican-controlled Legislature and Gov. Greg Gianforte the chance to make massive one-time investments.
According to the National Conference of State Legislatures, the state and local relief monies included in ARPA can be used to backfill budget shortfalls attributable to COVID-19, provide economic aid to individuals and businesses, give pay premiums to essential workers, or invest in water, sewer and broadband infrastructure. The bill specifies that states cannot use the money to offset the cost of tax cuts and must be spent by the end of 2024.
It isn’t yet clear how Montana lawmakers will allocate that money, though at least one bill, Sen. Jason Ellsworth’s Senate Bill 297, aims to create a state broadband infrastructure grant program that could be funded with stimulus dollars.
Gianforte Budget Director Kurt Alme told members of the House Appropriations Committee Tuesday that the governor would like to avoid using the stimulus dollars to set up new programs that will require ongoing funding.
House Appropriations Committee Chair Llew Jones, R-Conrad, told members of the budget committee Wednesday that the stimulus money will be appropriated through a pending bill carried by Rep. Frank Garner, R-Kalispell. Garner’s bill, which doesn’t yet have a number assigned, will be introduced this week without details, Jones said, then amended based on work from lawmakers assigned to appropriation subcommittees focused on specific topic areas such as education, health care and infrastructure.
“$2.7 billion — it’s a big bill. It’s larger actually than the General Fund,” Jones said.
The new round of individual stimulus checks included in the bill follows the $1,200 checks sent to many taxpayers under the CARES Act and $600 checks funded under another coronavirus relief measure passed by Congress in December.
Under ARPA, most individuals will qualify for $1,400 apiece, with payments phasing out at incomes above $75,000, or $150,000 for couples.
The bill also expands tax credits designed to help parents and working families, and extends the Pandemic Unemployment Assistance program, which offers expanded unemployment benefits for people who are out of work because of the pandemic.
The bill passed Congress with support from nearly all Democrats and opposition from all Republicans. Montana’s congressional delegation, Democratic Sen. Jon Tester, Republican Sen. Steve Daines and Republican Rep. Matt Rosendale, voted with their respective parties.
“This is a targeted bill that will help Montanans get a vaccine free of charge, and this bill will provide critical relief to families, to businesses, to veterans and much, much more,” Tester said in a video statement after the bill cleared the U.S. Senate. “It’s going to help get folks back to work, it’s going to get kids in school safely, and it’s going to help our economy recover as soon as possible.”
Daines derided the bill in a written statement as “filled to the brim with wasteful, non-COVID-19 related spending.”
“Shoveling all this money into an economy that is on the rebound is deeply irresponsible and will cause our debt to soar to new heights,” Daines also said.
Rosendale also criticized the bill, saying in a tweet that it “spends an exorbitant amount on far-left priorities.”All three members of Montana’s congressional delegation, Tester, Daines and then-U.S. Rep. Greg Gianforte, supported the CARES Act and the year-end coronavirus relief measures, the latter of which was included in the same legislative package as a provision implementing the CSKT water compact.
CORRECTION: This story was updated March 11, 2021, with the correct dollar amount of the CARES Act COVID-19 relief package signed into law by President Donald Trump. The correct amount is $1.7 trillion, not $1.7 billion.
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This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Discuss MTFP’s Long Streets work with Lead Reporter Eric Dietrich at firstname.lastname@example.org.