By David Lawder

WASHINGTON (Reuters) – The $350 billion in coronavirus relief funds for state and local governments has allowed U.S. cities to respond stronger and more nimbly to an ever changing COVID-19 pandemic, U.S. Treasury Secretary Janet Yellen said on Wednesday.

In remarks prepared for delivery to a meeting of the U.S. Conference of Mayors, Yellen said state and local governments have been creative in using the funding from last year’s American Rescue Plan to meet different needs at different times.

“This, I think, is some of what the $350 billion did: When Omicron started spreading around our cities, it did not find them broke and broken; it found them much readier to respond,” she said, referring to the State and Local Fiscal Recovery Fund.

“Rather than one burst of money that could only be spent in certain ways, it called for sustained funding, and our Treasury team has worked hard so you can use the money as flexibly as possible,” Yellen added.

She cited several examples of local uses of the funds, from $1,000 signing bonuses for new teachers at child-care centers in Columbus, Ohio, to Hawaii reversing its decision to furlough 10,000 state employees.

Minnesota has authorized over $80 million in funds from the program for health needs from rapid COVID tests to emergency surge staffing in hospitals, while St. Louis used $58 million from its allocation to spare residents from evictions and homelessness, supplementing rental assistance funds, she said.

She added that the American Rescue Plan funding allowed cities to move from fighting fires to “start building a better post-COVID world.”

Yellen struck an optimistic tone on the Biden administration’s sweeping “Build Back Better” social and climate spending bill, despite contentious congressional negotiations clouding its future.

“While we don’t know the final form this will take, it will revolutionize how we care for children in this country, invest in climate change, and overhaul the international tax system to ensure corporations pay their fair share,” Yellen said.

(Reporting by David Lawder; Editing by Kim Coghill)