In policy shift, feds to redirect ‘county’ ARPA funds to Vermont towns $121 million had been destined to 14 court 'jurisdictions'

By Shawn Cunningham
© 2021 Telegraph Publishing LLC

In a phone call to U.S. Sen. Patrick Leahy of Vermont last night, U.S. Treasury Secretary Janet Yellin confirmed that her department would issue new guidance today specifying that Vermont’s 14 counties do not constitute “units of general government,” and will therefore send $121 million more in American Rescue Plan Act funds through the state and on to cities, towns and villages. The news was sent to board members of the Vermont League of Cities and Towns that had advocated for the change.

“The whole (congressional) delegation has been working on this for quite a while,” David Carle, Leahy’s communications director told The Telegraph on Thursday. “Sen. Leahy raised it at length with Secretary Yellin during the budget hearing for her department on June 12.” Leahy is chairman of the Senate Appropriations Committee, which has oversight over Yellin’s budget.

Carle would not confirm the shift in Treasury policy, but did say Leahy’s office is looking forward to the new guidance.

Vermont is one of a handful of states where its counties do not have any general governmental responsibilities or powers, including the power to tax residents.

In a July 7 letter to Yellin, VLCT Director of Public Policy and Advocacy Karen Horn made the argument that the counties do not have the authority to carry out two of the key provisions of the ARPA legislation. Those are:

• responding to the Covid-19 health emergency “by paying for costs related to assistance to households, small businesses, non-profits and affected industries such as tourism, travel and hospitality” and
• “make investments in water, sewer or broadband infrastructure.”

Before the revision in guidance, the money would have gone to Vermont’s 14 counties to be administered by the judges who maintain the court system in each county. Use of the funds would have been up to the judges, but as Horn pointed out in her letter, if the funds were spent on ineligible items, the counties would not be able to repay the money and would have to pass the burden along to the towns in that county.

Horn asserted that the Treasury Department used outdated and incorrect census definitions that made it look as though the counties were general government entities. And while each county has courts that are administered by the judges, the court system is funded by the state and those judges are paid from state taxes.

The funds are substantially more than what has been slated to come to the towns from ARPA to date. For example, according to Chester Town Manager Julie Hance, the town is scheduled to receive a little more than $315,000 in two initial ARPA payments. But, she expects that Chester’s allocation out of the “county” money, while not confirmed, would be upward of $600,000.