The American Rescue Plan Act: Utilization of Federal Funds to Bolster Employment Supports for Persons with Disabilities

By Rachel Wright, Policy Analyst

Despite earlier evidence of higher unemployment rates among persons with disabilities compared to those without a disability, more recent employment data shows that two years into the COVID-19 pandemic, employment rates among people with disabilities have rebounded faster.  

While 2020 data showed both a disproportionate decrease in the employment rate of working-age people with disabilities and a slowed economic recovery rate among people with disabilities who experienced pandemic-related job loss, data from December 2021 showed a labor force participation rate of people with disabilities that exceeded pre-pandemic levels for the seventh consecutive month. Analysts suggested that the pandemic has created a labor market where persons with disabilities, who are often characterized as resourceful, may be capitalizing on supply-side shortages.

However, it may also be an indicator that programs to support workers with disabilities are seeing success, which makes it incumbent upon state policymakers and their partners to ensure their longevity as part of an inclusive post-pandemic economic recovery. That means a continued focus on recovery policies that bolster employment supports for these individuals and efforts to address the learning loss experienced by young adults who are preparing to enter or re-enter the workforce.

The American Rescue Plan Act: Flexible Funding for State and Local Leaders

Funds made available through the American Rescue Plan Act (ARPA) can be leveraged by state policymakers to achieve and continue to support inclusive economic recovery in the states. Passed in March 2021, the ARPA provides approximately $350 billion in fiscal assistance to state and local governments through the State and Local Fiscal Recovery Fund. State leaders have considerable discretion in how they can utilize State Fiscal Recovery Fund (SFRF) dollars, as long as they support programs that respond to the COVID-19 public health emergency and its negative economic impacts[1].

Given the demonstrated negative economic impacts of COVID-19 on persons with disabilities, funds appropriated through the SFRF can be utilized to establish and/or bolster existing employment support programs for persons with disabilities. States such as Minnesota and Nevada already have passed legislation appropriating funds for this purpose.

State Fiscal Recovery Fund: Appropriations to Support Inclusive Economic Recovery

On August 5, 2021, the Minnesota Department of Administration requested $960,000 in SFRF funds to support the work of the Office of Equity in Procurement. These funds will assist Targeted Group Businesses – small businesses owned by minorities, people with physical disabilities, and veterans – as they seek to do business with the state.

Also in Minnesota, the Department of Education (DoE) requested $1 million in SFRF funds for grants to school districts and charter schools. These DoE grants will support schools in providing, “secondary transition services to students with disabilities age 18 to 21 who lost instructional time in secondary transition programs during the pandemic.” Supported programs include Project Search, which provides internship sites in the private sector for students with developmental cognitive disabilities.

In Nevada, the legislature passed Senate Bill 461, authorizing the disbursement of $6 million in SFRF funds to the Collaboration Center Foundation. These funds will support services “implemented to address the negative or disparate impacts of the COVID-19 pandemic on persons with disabilities.” Supported programs include Inclusion Fusion, an organization dedicated to providing programs for individuals with disabilities that allow them to achieve a successful, independent life.

Nevada Senate Bill 461 also allocated $5 million to the State Treasurer for ABLE Savings Program grants for persons with disabilities under 18 years of age. These grants are intended to assist persons with disabilities who have been negatively impacted by the COVID-19 pandemic with expenses such as employment training and supports, assistive technology, personal support services, and other qualified disability expenses.

Tennessee is using ARPA funding to clear a 2,000-person waitlist for a program called Employment and Community First CHOICES that focuses on helping people with disabilities find employment and integrate into their community.

Throughout the states, legislation directing the use of SFRF funds is still under consideration.  To keep up to date with state fiscal recovery plans and related legislation, please visit The Council of State Governments State Recovery Resource Center.

For further information on how to craft economic recovery policies inclusive of persons with disabilities, please review:

For further information on the disproportionate impacts of COVID-19 on workers with disabilities, please review:

[1] Three additional authorized uses of SFRF funds can be read in the full text of the American Rescue Plan Act of 2021, available here.