Helpful Rules of Use of Rescue Plan Funds

On January 6, the Treasury Department issued Final Rules on the use of the American Rescue Plan's $350 billion in flexible aid to states and local governments. The final rules offer some significant new opportunities to advocate for public employees including:

• Hiring public employees above their pre-pandemic levels.
• Making public employees whole if they were furloughed or were hit with other pay cuts due to the pandemic.
• Offering public employees retention pay (up to 25% of their base pay in some cases) including  “reasonable increases in compensation to persuade employees to remain with the employer as compared to other employment options.”
• Using more of the money to pay for general government services when the government is determined to have experienced a revenue loss, including a new option to deem revenue losses at $10 million regardless of whether the government lost any revenue.

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For more details on the final rule, see the fact sheet.