Connecting state and local government leaders
Governments can leverage American Rescue Plan dollars to help local companies impacted by the pandemic, including those owned by women and minorities.
The influx of coronavirus relief funding from the American Rescue Plan Act includes ways for cities and states to help small businesses that have been disproportionately impacted by the pandemic, experts said Thursday at a virtual panel discussion during Route Fifty’s Future Cities event.
“Small businesses have borne the brunt of the economic effects of the pandemic, forcing many to close their doors forever,” said Kennedy Smith, a senior researcher at the Institute for Local Self-Reliance and the panel’s moderator. “The new wave of federal investments coming from the American Rescue Plan offers an unprecedented opportunity to reinvigorate the spirit of entrepreneurship within communities and help rebuild Main Street.”
The discussion, titled “Rebuilding Main Street: The American Rescue Plan in Action,” focused on ways that cities, counties and states can leverage federal funding to help their small business communities rebound in equitable and lasting ways. To begin with, Smith noted, ARPA contains a number of funding streams aimed specifically at the growth and development of small businesses, including grants for shuttered venues, a restaurant revitalization fund (and a legislative proposal to replenish it), as well as grants to outside entities like the National Endowment for the Arts that support community organizations.
Once a government entity identifies its available funding opportunities, officials should focus on holistic investment strategies that make efforts to include businesses owned by women and minorities, which were disproportionately impacted by the pandemic, said Lourdes German, founder and director of the Civic Innovation Project.
“You’re thinking about not just building the economic base of those entrepreneurs, but thinking about what that can mean for the tax base of the city,” she said. “One way that cities are doing this is by thinking strategically about the procurement process, in a way that creates awareness opportunities for those businesses beyond just the direct access to federal funding.”
For example, she said, officials in Durham, North Carolina tapped into federal funding but also explored additional funding streams, including a statewide rapid recovery loan program supported by the Golden LEAF Foundation. The city was also one of 30 to participate in a Bloomberg Philanthropies program designed to help officials advance equity while confronting budget shortfalls in the wake of the pandemic.
Those types of partnerships can help stretch dollars and ensure future funding, German said.
“You can bring in regional partners to give scale to some of these initiatives,” she said. “Even though these are time-limited funds, you can begin some really important projects that are going to provide a blueprint for a healthy and thriving city, through which those businesses can integrate into the fabric of the community.”
Government leaders can also use federal funding to extend temporary provisions that proved successful during the pandemic. In many cities, including Pittsburgh, leaders are setting aside relief money to upgrade and maintain “streateries,” or temporary restaurant seating areas in streets and parking spots where residents can gather safely outdoors for meals.
“It’s one of those situations that you don’t know you can actually try something like taking away parking spaces in a city until you actually try it,” said Erika Strassburger, a member of the Pittsburgh City Council. “We did it, and a lot of people are now accustomed to it.”
Because of the program’s success, the council is dedicating $1 million in federal funding to upgrade certain dining areas to be more comfortable, aesthetically pleasing and permanent, Strassburger said.
Other Revenue Streams
To keep tabs on available funding streams and application guidance, German recommended that government officials watch the regular updates on the U.S. Treasury website. Leaders should consider not only their local funding eligibility, but opportunities at the county and state levels, as well as available options to “make sub-grants and sub-awards to nonprofit partners,” she said.
In Pittsburgh, city leaders retained an outside consulting firm to keep tabs on the changing federal directives, Strassburger said. It’s an option that not every government can afford, but leaders there thought the investment was worthwhile given the scope of the available relief money.
“If we have to spend the money over four years, or there are extra sources, we don’t want to be left having to return money because we misused it,” she said. “We paid the money to make sure we’re getting it right.”
In the immediate aftermath of funding allocation, and as the pandemic continues to ebb and flow, it may be difficult to assess the overall effects of relief efforts on small businesses, the panel said. But the individual victories, Strassburger said, are easier to come by, like the owner of a vintage clothing shop in Pittsburgh who obtained a small business loan that kept his store afloat.
“His business was saved,” she said. “And then he has the potential to have his loan forgiven, and that will once again save his business. I think we have to look at the depth and the breadth. What is the value of one business being saved versus 100 businesses being saved? Even the loan programs that came through during the pandemic were lifeboats for so many. All we can do is allocate the money as fairly as possible and listen to the need.”
Kate Elizabeth Queram is a senior reporter for Route Fifty and is based in Washington, D.C.