Harris County and the city of Houston have allocated the entirety of their combined $1.5 billion in federal pandemic relief money ahead of the end-of-year deadline set by the U.S. Department of the Treasury, but residents may not know how the city will spend the last of its funding until early next year.
As the coronavirus pandemic sent the country into an economic downturn, Congress passed the American Rescue Plan Act in March 2021 to speed up the nation’s recovery. Some $350 billion of that aid was sent to local governments to address economic and social impacts in their communities. The money gave jurisdictions a large amount of flexibility to use the money as they saw fit.
The funds are required to be allocated and obligated by the end of this year, and must be spent by the end of 2026.
Harris County received $915 million in ARPA funding, and accrued interest boosted its total to $996 million. The city of Houston received more than $607 million. Officials told the Landing all funds had been allocated, but the city declined to share its final spending amounts.
The city used the majority of its funds – $472 million – to replace revenue lost during the pandemic-induced economic slowdown, according to the city’s October report. That money was added to the city’s general fund to pay for ongoing services, such as solid waste, public works, police and fire.
Harris County used the entirety of its federal funding for constituent services, such as enhanced public safety, early childhood initiatives and affordable housing, according to the Office of County Administration.
Smaller surrounding cities – which received substantially less funding in comparison – used the federal aid in myriad ways. Pasadena and Galveston spent the majority of their respective funds on infrastructure improvements related to the quality of drinking water. Pearland used a majority for police patrol and revenue replacement.
The Metropolitan Transit Authority of Harris County received nearly $437 million in ARPA funding in the form of four grants from the Federal Transit Administration, according to Lester Gretsch, media relations director.
That funding, along with other COVID stimulus grants, was used to reimburse the agency for expenses to support operations, including fuel costs, equipment maintenance and drivers’ wages, along with preventative measures to protect riders and staff from COVID.
County priorities
Commissioners Court prioritized the federal funds for five areas: health, housing, jobs and education, justice and safety, and county operations. Court members also created a framework to consider those most impacted by the pandemic and to ensure community engagement throughout its projects.
The county was under Republican leadership for decades, in which Commissioners Court largely focused on infrastructure, as is typical of Texas counties. When Democrats gained the majority in 2018, officials had a vision for a more expanded role beyond funding flood control, roads and parks.
The ARPA funding helped the Democratic-led court invest in expanded social service programs, particularly ones aimed at strengthening the safety net for the unincorporated areas of the county.
One of those investments was a $9.1 million contract to double enrollment in local union apprenticeships in the building and construction trades and create new ones in the entertainment and transportation industries. The investment was among the largest in union apprenticeship training programs in the country.
County leaders also undertook a $6 million gun violence interruption program, including $1 million for a guy buyback initiative with the city, and invested $5 million in Holistic Assistance Response Teams to help tackle 911 calls involving mental illness, drug use, homelessness and social welfare
Other examples include $34 million spent on indigent defense and more than $18.8 million in grants to improve child care quality through the county’s Early Learning Quality Networks.
"In the next 10 years, I would like to see our most successful ARPA programs become permanent in Harris County,” County Judge Lina Hidalgo said in a statement. “The programs we started with these dollars are still up and thriving, like creating more childcare spaces for parents and families, making sure kids and families have nutritious food to eat, providing affordable housing for all, and helping residents become homeowners.”
In perhaps its most controversial attempt to use ARPA funding, the county has spent much of this year trying to launch a guaranteed income program that would give monthly $500 stipends to more than 1,900 low-income residents. Texas Attorney General Ken Paxton sued the county over its first iteration of the $20 million program, arguing that even though it is being paid for by federal funds, it violates the state constitution. Local leaders revamped the program in hopes of addressing those concerns, but Paxton again got the program blocked. The case still is being hashed out in state court.
Revenue replacement
The Landing requested the final list of allocated spending from Mayor John Whitmire’s office. The Office of Intergovernmental Affairs, which oversees the ARPA dollars, has refused to share an accounting of the final allocations until reporting the final numbers to the U.S. Department of the Treasury.
A decision by the U.S. Department of the Treasury late last year to require local governments to obligate, not just budget, ARPA funds by the end of 2024, prompted the city to decide not to start any new projects in the last quarter, said Joshua Sanders, the city’s chief of intergovernmental relations.
“There's been a lot of interest of, ‘Hey, is there any money left? Could you throw some at this, project or this program that we're doing?’” Sanders said. “And so we've had to take in those requests and do kind of the analysis of cost-benefit. How has it been performing up to this point?”
An online federal database detailing how the city’s ARPA dollars are used is only updated through June 30. According to the database, the city at that time had allocated $570 million and spent more than $551 million.
In an October overview, the Whitmire administration reported more than $569 million in expenditures through September.
Early pandemic dollars were spent to fill budget shortfalls of roughly $201 million in 2021, the Houston Chronicle reported at the time. As of June, the city had used about three-quarters of its ARPA funding to replace revenues lost to the pandemic.
Some ARPA funds were spent on one-time purchases, such as new solid waste vehicles. Other projects have come to a close as the funding dried up, such as the Dinner to Home homelessness initiative that ended in June.
Whitmire this week said he asked department heads to tally what had not already been spent to recoup some of the funds, but the majority had already been obligated. He said he "unfortunately" inherited a list of projects that used the ARPA one-time funding for ongoing projects.
He would have preferred the funds go to one-time uses, such as improvements at the West Gray Multiservice Center or homelessness initiatives, he said. Instead, he said the majority of the funds were already dedicated, and the final unallocated dollars went to police overtime.
Programs the city wants to continue without ARPA funding will need a continued investment without federal dollars – which could prove difficult as Houston faces a growing $200 million deficit in 2025.
The cadet retention program that originally gave $10,000 bonuses to more than 700 incoming police officers is the most recent initiative to expand and pull from the general fund, costing Houston more than $800,000 next year.
Reporters Akhil Ganesh and José Luis Martínez contributed to this story.
Republish our articles for free, online or in print.
