The money is coming. But how it will be spent is still an open question.
Alabama leaders have a rare chance to use federal money to make significant improvements to the state’s broadband networks and other infrastructure systems, but leaders need to plan carefully for its spending in order to stay competitive with states that have the same opportunities, Alabama Finance Director Bill Poole told a panel of lawmakers Thursday.
“Every state in this country is going to spend an enormous amount of federal funds on broadband, on water and sewer infrastructure, on health care …,” Poole said during an update on the Alabama Rescue Plan Act and Infrastructure Investment and Jobs Act, two federal laws that will infuse billions into the state.
Poole said the state’s objective “should recognize that we’re in a competition with other states and we have to take this opportunity of a lifetime to advance further than those other states do in their investments so that, when the dust settles, we’ve improved our competitive position for the benefit of all of our citizens, rather than fallen further behind.”
Poole and Kirk Fulford of the Legislative Services Agency outlined for lawmakers the multiple pools of federal money that can support infrastructure projects but noted they have different rules for spending, will become available at different times and “have different strings attached,” Poole said.
He said the state needs a plan “and then plug those funds into that plan.”
That money includes about $580 million in ARPA funds received this year and another $1 billion expected in May or June. Allowable potential uses include infrastructure, public health, assistance for those hurt by the pandemic, bonus pay for private and public sector employees and replacement money for revenue the state lost because of the pandemic.
The state has until the end of 2024 to allocate the money and the end of 2026 to spend it.
Poole warned against allocating in the upcoming legislative session the ARPA money not yet received because the rules on how it may be spent could change. That session begins Jan. 11.
Sen. Greg Albritton, R-Range, the Senate’s General Fund chairman, told Alabama Daily News that lawmakers will likely focus on the $580 million in ARPA funds already received and wait to allocate the rest later. While some lawmakers may file bills trying to get ARPA money for pet projects, they aren’t likely to get far, Albritton said.
“We’re trying to find a path where we can use this money for the future and betterment of Alabama,” Albritton said. That exact path and process isn’t yet known.
“We are evaluating all of the potential needs and will continue working with the Legislature, who ultimately allocates the APRA money,” Gina Maiola, a spokeswoman for Gov. Kay Ivey, said Thursday.
However the money is spent, the required record keeping will be complex and extensive, needed quarterly until all the money is gone.
Poole warned lawmakers they will need a reporting system that will allow for easy audits. He said a preliminary “placeholder” report to the federal government took his staff about three days earlier this year.
Additionally within ARPA is $192 million “to carry out critical capital projects directly enabling work, education and health monitoring, including remote options, in response to the public health emergency with respect to the Coronavirus Disease.”
And the infrastructure law guarantees at least $100 million, but likely much more, in broadband assistance for the state. It also has an expected $782 million for water projects in Alabama.
Rep. Randall Shedd, R-Cullman, has advocated for broadband funding for years and reminded his colleagues Thursday that it will take billions of dollars to get high speed Internet to underserved and unserved areas of the state.
“As we move forward, keep in mind that people need help with slow or no internet,” Shedd told his colleagues.
More information on the broadband needs in the state may be available when the new Alabama Digital Expansion Authority meets next week. The authority was created by lawmakers earlier this year to oversee the expansion of high-speed broadband internet services, but no funding stream was assigned to it.