One thing I’ve noticed in conversations I have with people working in nonprofit and public finance is a growing nervousness around the coming expiration of ARPA funds.
According to a blog post from the Economic Policy Institute last month, 2024 is the last opportunity for state and local governments to make spending decisions on ARPA funds. State governments have only decided how to spend about $140 billion of the $200 billion allocated to them while local governments have only decided how to spend $59 billion of the $100 billion allocated to them. This means about $100 billion in ARPA funds for state and local governments have not been decided on yet.
Even if all these funds are allocated, they will run out in 2026. This is temporary state and local support and any programs they fund will have to find new sources of funding or cease. Many schools are set to lose ARPA funding in September of this year.
COVID-19 was a unique time in our public policy history. Policymakers responded much more quickly than usual, putting aside political differences to rally behind emergency measures in a way that mirrored wartime unity. The package of allocations for state and local governments, cash transfers to taxpayers, and expansion of programs like SNAP and school lunches represented a general acceptance among policymakers that the public sector needed to support individuals because there was an external threat, no fault of their own, that they needed protection from.
The strange thing about this assessment is that this is the problem of poverty every day of every year. Very few people choose poverty the same way they choose what to wear in the morning. Poverty chooses them.
One of the problems with how policymakers approach poverty is that it is often treated as some sort of cosmic justice for people’s decisions in the past. The hesitancy policymakers have to even address child poverty suggests this goes beyond a belief that is rooted in empirical evidence or some idea of who deserves what. It reflects a belief that there is something metaphysical that levies poverty on these children. Either that, or that child poverty is somehow justice for parents who make poor decisions.
We at Scioto Analysis are here to dispel this myth. No one deserves poverty. And a strong social safety net that catches people when they are about to fall into it creates safety that lets people climb the tightrope and take risks that lead to innovation. A landmark 2018 study found someone in the richest 1 percent of the country was ten times more likely to be an inventor than someone in the poorest 50 percent of the country. This is because people in the richest 1 percent have a safety net not available to the bottom 50 percent–family support.
With the unity of the COVID-19 pandemic long gone now, old notions of desert of poverty are back in vogue. But poverty continues to cause problems for people in poverty and people not in it alike. Are policymakers willing to confront this problem or will they push their heads deeper in the sand?