Giving RI a Better Shot at Economic Recovery: Reed Delivers $1.78 Billion Boost to RI Through State & Local Aid Provision of American Rescue Plan

Press Release

Today, Congress approved the $1.9 trillion American Rescue Plan, which includes several billions of dollars of overdue financial relief to Rhode Island families, support for small businesses, a boost for COVID-19 vaccination distribution, and funds to help safely reopen schools.

Thanks to a key provision of the American Rescue Act championed by U.S. Senator Jack Reed (D-RI), $1.78 billion of fiscal aid will soon be on the way for the state of Rhode Island and cities and towns across the Ocean State. The overall bill will also provide several billions of dollars in federal aid to Rhode Islanders, including: direct payments of up to $1,400 to eligible Rhode Islanders (estimated to provide $1.2 billion to nearly 500,000 Rhode Island households); about $980 million in extended unemployment insurance benefits for Rhode Island job seekers; hundreds of millions of dollars for Rhode Island K-12 schools and colleges; hundreds of millions for health, housing, transportation, infrastructure, and workforce development; and many other vital programs.

Senator Reed also helped successfully include a total of $362 billion in long-sought federal assistance to state and local governments that have seen their budgets depleted by COVID-19.

"This direct relief represents a major boost to Rhode Island's economy. Vaccines help save lives. And these funds will help revitalize communities by providing a needed injection of federal relief to state and local governments that have been impacted by the pandemic. I worked hard to include a strong state and local aid package in this bill, and I am confident states, cities, and towns nationwide will use it productively," said Senator Reed, who was also a leader in the successful effort to include $150 billion for state and local aid in the CARES Act, which directed $1.25 billion to Rhode Island last year for direct pandemic response.

Senator Reed worked with Senate leadership to include state and local fiscal relief funds to keep first responders, frontline health workers, and other providers of vital services safely on the job as states and local governments accelerate vaccine delivery, bolster the economy, and provide critical support to Main Street. Under the bill, this federal funding may be used to provide assistance to households, small businesses, non-profits, aid to impacted industries such as tourism, travel, and hospitality, investments in water, sewer, and broadband infrastructure, and to provide premium pay to frontline workers. Local governments of every size, including cities and towns, may receive dedicated federal aid awards. And a new $10 billion capital projects program also supports state broadband deployment efforts.

Of the estimated $1.78 billion in federal funds allocated to Rhode Island, set asides include $1.124 billion for the State of Rhode Island.

Rhode Island's biggest cities are estimated to receive about $282 million, including roughly:

$131 million for Providence
$46 million for Pawtucket
$33 million for Woonsocket
$27 million for Cranston
$24 million for Warwick
$19 million for East Providence
Smaller communities across the state will share an estimated pot of up $55 million, including:

Barrington: $1.59 million

Bristol: $2.17 million

Burrillville: $1.67 million

Central Falls: $1.94 million

Charlestown: $780,000

Coventry: $3.45 million

Cumberland: $3.5 million

East Greenwich: $1.3 million

Exeter: $650,000

Foster: $470,000

Glocester: $1 million

Hopkinton: $800,000

Jamestown: $550,000

Johnston: $2.9 million

Lincoln: $2.18 million

Little Compton: $340,000

Middletown: $1.58 million

Narragansett: $1.52 million

New Shoreham: $100,000

Newport: $2.4 million

North Kingstown: $2.6 million

North Providence: $3.24 million

North Smithfield: $1.25 million

Portsmouth: $1.7 million

Richmond: $770,000

Scituate: $1.06 million

Smithfield: $2.17 million

South Kingstown: $3 million

Tiverton: $1.55 million

Warren: $1.04 million

West Greenwich: $630,000

West Warwick: $2.87 million

Westerly: $2.22 million

Another pot of $205 million is slated to be shared by all communities, based mostly on population size.

Another estimated $113 million may be utilized by the state of for critical capital projects throughout the state to directly enable work, education, and healthcare, including remote options, in response to the pandemic.

Under the language of the Senate bill, which was accepted by the House, state and local aid may also be used "for the provision of government services to the extent of the reduction in revenue…due to the COVID--19 public health emergency relative to revenues collected in the most recent full fiscal year…prior to the emergency." And as with all laws of this nature, pieces of the legislation will be the subject of guidance from the U.S. Department of Treasury regarding future implementation.

The law itself contains some notable restrictions on how the money may be used, including:

States and communities are prohibited from using the aid to support pension funds.
Relief for local governments is divided into two phases, with the second tranche of federal funds coming at least a year later.
States and localities have until the end of 2024 for eligible uses like COVID-19 costs or its negative economic impacts, government services, or infrastructure investments.
"I've championed these funds for so long because no state, including Rhode Island, could ever have budgeted for this kind of pandemic. States and localities have been forced to shoulder considerable and unexpected costs as they raced to save lives and livelihoods. They should not be penalized for stepping up to help. Instead, the federal government needs to step up and be a reliable partner. This new federal funding will help provide an economic boost at a critical moment," concluded Senator Reed. "I am pleased Treasury Secretary Yellen has pledged to get this money out the door as quickly as possible, and I will continue working to provide oversight of this funding and ensure it is put to good use. The road to recovery is long and steep but this will provide a tremendous boost to Rhode Island and the nation."

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