GFO says $2.7 billion in ARPA funds mostly obligated; offices plan reallocations and staff changes

At a joint meeting of the Assembly Committee on Ways and Means and the Senate Committee on Finance on Feb. 25, 2025, Governor’s Finance Office officials told lawmakers the state’s $2.7 billion in American Rescue Plan Act (ARPA) State Fiscal Recovery Funds are largely obligated and that staff are preparing budget amendments and options to reallocate unspent dollars.

Deputy Director Curtis Palmer said the state was awarded $2,700,000,000 and "these funds must be completely expended by December 30, 2026," and that the office has met the U.S. Treasury obligation deadline of Dec. 30, 2024. He said the program administered by the governor’s finance office currently supports 380 projects: 162 are complete, 113 are 50% or more complete, 80 are 50% or less complete, nine have not started (no reimbursement requests to date) and 16 were canceled. Palmer said the state has spent "a little over $1,500,000,000" of the appropriated funds so far.

The GFO presentation described eligible ARPA uses that include lost revenue, public health and addressing negative economic impacts, and investments in water, sewer and broadband. Palmer said administrative costs and consultant support for program management are allowable uses and that the office is monitoring projects monthly.

Lawmakers pressed for details on projects that were not started and those that were canceled. Palmer said the "not started" designation means the recipients had not requested reimbursements; he offered to provide a list to legislative staff. On canceled projects, he said many were removed early after sponsors concluded the projects were not feasible.

Members asked whether large unspent balances — discussed in committee as examples in the hundreds of millions for broadband-related work — are visible in the executive budget. Palmer and Director Tiffany Greenmeier explained that some authority appears in fiscal 2025 and is expected to be balanced forward into fiscal years 2026–27 via budget amendments (decision unit references E499/E599 were cited). Greenmeier and Palmer said the office will prepare any necessary adjustments and bring reallocation proposals to legislative fiscal staff and the Interim Finance Committee if funds become available.

On the timeline, Greenmeier told the committee the office aims to be "solid by July 1, 2025" about which projects will return funds and which will continue, to allow time for reallocations and to avoid having unobligated dollars lapse. Palmer clarified that reallocations would be handled within state processes and would come before the Interim Finance Committee when required.

Palmer and GFO staff said they maintain an internal short list of candidate projects that could receive returned funds and that they will provide more formal documentation and lists to legislative staff on request.

The meeting included no formal votes on ARPA reallocations; staff said specific movements of money would be proposed later if and when funds are identified for reallocation.