What happened to New Orleans’ American Rescue Plan money?

The City of New Orleans received $388 million in federal funds meant to help the City and most-impacted residents, families, and businesses recover from the COVID-19 Pandemic. This works out to about 59% of the City’s usual annual operating budget. Funds arrived in 2 payments, half in the fall of 2021, and the other half in the fall of 2022. The City has to allocate the funds by 2024 and spend them by 2026.

Now that the funds have all been allocated, let’s look back at how we got here.

Where did the money go?

The vast majority of the American Rescue Plan funding went toward restoring lost tax revenue, and within that, most went to public safety (the 3 blue pie slices in the chart below).

Shifting Priorities

The first tranche of American Rescue Plan funding went quietly, almost exclusively to restoring lost tax revenue, and without a public process. These funds were initially allocated to the NOPD and NOFD, before being moved through a series of budget changes to cover other expenses, including covering backpay for City employees that were furloughed during lockdown ($70M). After Hurricane Ida, $5M from the first tranche went toward utility assistance for impacted residents.

The Mayor & CAO’s office had doubts that the second tranche of ARPA funding would ever arrive, so they delayed planning for the second tranche of funds until well into 2022. At that point, the Mayor’s team released a press release listing $284 million in priority projects, well over the $194 million available through the second tranche of ARPA funds. At that time, the City intended to invest most of the funds in financial aid and housing, and economic development & support for workers.