ARPA Report Opens for Cities Nationwide
This Tuesday, April 1, the U.S. Department of Treasury opened the 2025 Project and Expenditure Report – colloquially known as the “ARPA report” – for cities to report how they allocated and spent the American Rescue Plan Act (ARPA) funds they received in 2021 for COVID-19 relief. The report is now available to complete in the portal https://portal.treasury.gov/compliance and will be due by April 30, 2025. As of this writing, the Treasury Department has not yet released the latest reporting “User Guide,” however, GMA strongly urges every city to get started on their reporting, input everything they can, and submit when ready.
GMA’s review of the 2025 report reveals very few changes from previous years; most of the identified changes ask that your city attest to understanding the consequences of non-obligation and insufficient reporting. Any funds reported as unobligated will be subject to recoupment by Treasury, as detailed in the March 25 notice Treasury sent to every ARPA recipient.
GMA is preparing step-by-step instructions on how to submit the ARPA report and will release those instructions next week here.
Protecting Municipal Bond Financing
Representative Don Bacon of Nebraska is sponsoring a “Dear Colleague” letter with fellow Republicans to urge the U.S. House Ways and Means Committee to maintain the tax-exempt status of municipal bonds, a financing tool that has attracted investors with tax-free interest and enabled the construction of over three-quarters of our nation’s infrastructure.
In recent months, Congress has threatened to remove the tax exemption as a way to fund the extension of tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) set to expire at the end of 2025. An analysis from Stifel finds that without the tax exemption, the borrowing costs of a $25 million bond would increase by $7 million. The costs of a $50 million bond would increase by $13 million.
Tax-exempt municipal bonds are a popular financing tool but have come under threat in the past. This happened as recently as 2017 in the lead up to the passage of the TCJA, which protected tax-exempt municipal bonds but removed the advanced refunding option that allowed local governments to refinance debt at lower interest rates. The Government Finance Officers Association has an advanced refunding explainer here.
Bottom line: Cities rely on tax-exempt municipal bonds to finance large-scale community projects, save taxpayers money and support job creation and economic growth in their communities. Representative Bacon’s letter signals an important step toward protecting this tax exemption. Ongoing advocacy by city leaders and other local government stakeholders will be critical to seeing this protection through.