Maryland cities, counties balance immediate need and longterm impact in federal stimulus plans

Published on: September 06, 2022 6:00 AM EDT|Updated on: September 07, 2022 3:10 PM EDT

6/16/22—Signs reading “Baltimore County Maryland” and “Baltimore County Council” hang on the wall inside the historic Baltimore County Courthouse in Towson, the center of county government.

More than $2 billion in federal pandemic relief money has arrived in Maryland counties, cities and towns since last spring, a windfall that many local leaders see as a rare chance to make transformative investments in areas of longstanding need.

Baltimore has received $641 million — the largest single allocation among local governments in Maryland — and city leaders have spread the funding across more than a dozen spending categories. But in Maryland’s other most populous cities and counties, the floods of cash from the federal American Rescue Plan Act have ranged from tens of millions to more than $200 million. Even some towns of just a few thousand residents have seen multimillion-dollar infusions.

County governments have prioritized a range of sectors, including housing, food insecurity, tourism, small businesses, public health, and broadband, according to Kevin Kinnally, legislative director for the Maryland Association of Counties. Many cities and towns have tended to target investments toward public facilities, water and sewer infrastructure, said Marc Nicole, deputy director at the state Department of Budget and Management. Both Kinnally and Nicole helped facilitate ARPA disbursements at the local level.

Expectations in some jurisdictions are lofty.

“We’ve said our heartbeat behind this is to make generational and lasting change,” said Dan Lewis, the deputy director of finance for Frederick County. Lewis pointed to an academic tutoring program the county has established for children in public housing, an ARPA-funded initiative he said has the potential to change the life trajectories of 100 kids who go through the program. “Those are the kinds of things that can really move the needle in our community,” he said.

Hagerstown, a city of about 44,000, has targeted local opioid addiction and abandoned homes, putting half a million dollars each towards a 24-hour crisis center and a program for restoring or demolishing vacant houses. Mayor Emily Keller said Hagerstown has allocated almost a third of its $20.4 million towards water and sewer infrastructure, used $1.2 million to buy a new fire truck and hired a liaison to connect at-risk residents with social services.

When the city first learned of its incoming federal stimulus, Keller said officials “threw everything at the board,” coming up with their dream ideas, and then narrowed the list from there.

“That’s been kind of the hardest part,” she said. “It’s truly a blessing to get this money, but how do you spend it?”

Federal guidance for ARPA — which sent $350 billion to state, local and tribal governments nationwide — is flexible, allowing local leaders to test-drive new ideas and allocate funding where they see the most potential. Local governments have until the end of 2024 to allocate their funds and until the end of 2026 to spend the money.

Baltimore County

Compared to Baltimore City, surrounding Baltimore County has received a relatively small infusion from the American Rescue Plan, County Executive Johnny Olszewski Jr. noted in an interview. At just under $161 million, the county received a stimulus allocation about a quarter the size of Baltimore’s.

Still, Olszewski has pitched ARPA as a “once-in-a-generation” opportunity to move the county beyond pre-pandemic standards. The county has taken pains to find ways to sustain expenses they create under the federal stimulus, Olszewski said. Though they’re working with less funding than Baltimore, “there are going to be more specific, targeted areas that I think will be transformative.”

One such area is the economically distressed coastal community of Essex, where Baltimore County has so far established a $3 million stimulus-funded program aimed broadly at improving quality of life in the area. Olszewski teased forthcoming ARPA awards for public safety in Essex, in addition to broader public safety initiatives, parks projects and investments in mental health and workforce development.

And like many other large stimulus recipients in Maryland, Baltimore County has stressed the federal stimulus as a chance to ease inequities. Mapping by county officials identifies hotspots for public safety, food insecurity and other needs fanning out from the eastern and western borders of Baltimore City — areas that Jasmine Clemons, the county’s chief of policy and recovery impact, said are priority zones for the pandemic stimulus.

The county, which is under a 2016 agreement with the U.S. Department of Housing and Urban Development to provide 1,000 units of affordable housing by 2027, has put its largest single allocation to date, at $16 million, into an affordable housing trust fund, part of a broader plan that Olszewski said will help the county “change the paradigm around housing” and exceed the federally imposed goal.

In total, Baltimore County has allocated close to half of its ARPA funding for its public health response to the pandemic, and another $60 million to a slate of investments aimed at economic growth and recovery, among them housing, public safety and environmental resiliency. Close to $20 million remains unallocated, though Clemons said the county could reroute some commitments based on future needs.

Immediate gaps and long-term impact

For many local governments, the infusion of federal stimulus money has presented a choice between immediate community needs and the opportunities for long-lasting change.

“So many people want to see that money working,” said Kinnally, of the Maryland Association of Counties. “But we also want to invest in longer-term projects that are going to work for the community for years and years to come.”

It’s a dilemma that quickly confronted officials in Frederick County, where their $50.4 million ARPA allocation barely exceeded a revenue shortfall that the county suffered as a result of the pandemic. Under federal guidelines, the county could have used nearly all of their stimulus money to balance its budget, an option that some local governments around the country have taken in order to sustain existing services.

But Lewis said the county wanted to “stick to the spirit and intent of ARPA,” seeing the federal boon as a chance to develop new programs “to stem the tide of the pandemic and to help a good and lasting recovery.”

Maryland’s fastest growing county, Frederick has opted for an array of projects with its stimulus money, some of them out-of-the-box ideas. Among them, the county has put millions into broadband infrastructure, another $2.4 million into a farmers’ relief program to help with high fertilizer costs, $8 million for a universal nurse visitation program for the families of newborns, as well as various allocations for public transit improvements and bus line optimizations.

Not all jurisdictions in Maryland have taken such an experimental approach. Leaders in Annapolis have used close to half of its $7.6 million allocation on lost revenues from the pandemic — much of it for offsetting a shortfall in parking and other transportation fees — while they are holding the rest in reserve for the time being.

Annapolis Mayor Gavin Buckley called the funds a lifeline that have prevented city layoffs and benefitted the community from the “ground up.” But he also noted Annapolis received a relatively small infusion and has needed to spend it sparingly.

“We had to use it where we were hit, and we were hit on revenue,” Buckley said.

Anne Arundel County, which encompasses Annapolis and shares some government agencies with the state capital, landed more than $112 million in federal COVID stimulus funding and has moved much of it out the door quickly. The county had spent more than half of its allocation by the end of July, according to a county dashboard. Baltimore, by comparison, reported spending less than 7% of its $641 million in an end-of-July progress report to the federal government.

Chris Trumbauer, a senior policy advisor in Anne Arundel, highlighted one-time expenditures to make playgrounds accessible to disabled children, upgrade water and wastewater systems, and acquire an apartment building for homeless services and transitional housing.

Like many of Maryland’s other large ARPA recipients, Trumbauer said Anne Arundel has looked for “transformational” ways to spend its stimulus money. At the same time, he noted pressing needs in the county, like worker shortages. Anne Arundel has budgeted close to $7 million of its stimulus funding for bus driver bonuses.

Budget writers can never know for sure where they’ll be short on resources, Trumbauer said. An advantage of the stimulus is that it allows them to “run a substitution in the middle of the game.”

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