COVID-19 Stimulus Bill and Impact to States

Published: March 26, 2020

SLED Market AnalysisCommunity DevelopmentCoronavirus (COVID-19) PandemicEconomic Development/RegulationEducation (Higher)Education (Primary/Secondary)General Government ServicesGrantsHealth CareJustice/Public Safety & Homeland SecurityPolicy and LegislationSocial ServicesTransportation

On Wednesday, March 25th, The U.S. Senate approved an estimated $2 trillion stimulus package to battle the COVID-19 pandemic. Some of the major areas that will provide relief to State, Local and Education (SLED) governments that our SLED contractors should pay a particular close eye on.

  • Creates a $150 billion Coronavirus Relief Fund for state, local and tribal governments, of which $100 billion will be emergency funding to hospitals. 
  • Provides $45 billion for the Disaster Relief Fund for the immediate needs of state, local, tribal and territorial governments to protect citizens and help them respond and recover from the overwhelming effects of COVID-19.
  • Provides an additional $4.3 billion, thorough the Centers for Disease Control and Prevention, to support federal, state and local public health agencies to prevent, prepare for, and respond to the coronavirus.
  • Provides $30 billion for an Education Stabilization Fund for states, school districts and institutions of higher education for costs related to the coronavirus. 
  • Provides $25 billion for transit systems. These funds would be distributed through existing formulas including the Urbanized Area Formula Grants  and Formula Grants for Rural Areas  using fiscal year 2020 apportionment formulas.
  • Provides $400 million in election security grants to prevent, prepare for, and respond to coronavirus in the 2020 federal election cycle. 
  • Extends the Oct. 30, 2020, Real ID implementation deadline to Sept. 30, 2021.

Below is the National Conference of State Legislatures initial summary of of the provisions and impacting the States.GovWin focused on pulling provisions that have the potential biggest impact on SLED government contractors.

Direct Economic Stimulus Funding to States, Territories, Local Tribal Governments

  • Provides $150 billion to states, territories, local and tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions.
    • Distribution is based on population. No state shall receive a payment for fiscal year 2020 that is less than $1.25 billion.
    • 45% of a state’s funds are set aside for local governments, with populations that exceed 500,000, with certified requests to the U.S. secretary of Treasury. Certification requires a signature by the chief executive of the local government that the uses are consistent with certain requirements.
    • $3 billion set aside for District of Columbia, Puerto Rico, Virgin Islands, Guam, Northern Mariana Islands and American Samoa.
    • $8 billion for tribal governments.

Federal Emergency Management Agency

  • $45 billion for a Disaster Relief Fund for the immediate needs of state, local, tribal and territorial governments to protect citizens and help them respond and recover from the overwhelming effects of COVID-19. Reimbursable activities may include medical response, personal protective equipment, National Guard deployment, coordination of logistics, safety measures and community services nationwide. This amount includes:
    • $25 billion for major disasters declared for certain states under the Stafford Act.
    • $45 million for the Federal Emergency Management Agency to expand information technology and communications capabilities and build capacity in response coordination efforts.
    • Disaster Relief Fund dollars for COVID-19 are made available to states via the March 13 national emergency declaration and subsequent state declaration requests.

Labor-Related Provisions

  • $5 billion for Community Development Block Grant (CDBG) program to enable states, counties and cities to respond to economic and housing impacts caused by COVID-19, including the expansion of community health facilities, child care centers, food banks and senior services.

Other Homeland Security/Disaster Relief

  • $100 million for Emergency Management Performance Grants for emergency management activities in state, local, territorial and tribal governments to support coordination, including communications and logistics.
  • Personal Protective Equipment includes:
  • $200 million for the Emergency Food and Shelter Program to provide shelter, food and supportive services to individuals and families in sudden economic crisis.
  • Extends Real ID deadline for full implementation by states from Oct. 1, 2020, to Sept. 30, 2021.

Health Provisions

  • $140.4 billion for the Department of Health and Human Services.
    • $127 billion for the Public Health and Social Services Emergency Fund including $100 billion for grants to hospitals, public entities, not-for-profit entities and Medicare- and Medicaid-enrolled suppliers and institutional providers. Helps cover unreimbursed health care-related expenses or lost revenue as a result of COVID-19. $16 billion for the Strategic National Stockpile. The stockpile funding can help procure personal protective equipment, ventilators and other medical supplies. $11 billion for vaccine, diagnostics and other medical needs with $3.5 billion to help advance construction, manufacturing and purchasing of vaccines and therapeutic delivery.
    • $250 million to improve the capacity of facilities in order to respond to medical events.
    • $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers and the Ryan White HIV/AIDS program through the Health Resources and Services Administration (HRSA). The legislation would also allow community health centers to use fiscal year 2020 funding to maintain or increase staffing and capacity to address COVID-19.
    • $4.3 billion to the Centers for Disease Control and Prevention (CDC) and to assist with agency efforts on public health preparedness and response including funding to state and local public health responders and reimbursements. There is also $500 million designated to invest in public health data surveillance and infrastructure modernization to help states in developing COVID-19 tools.
    • $425 million to the Substance Abuse and Mental Health Services Administration (SAMHSA) for mental health and substance use disorders as a result of the COVID-19 pandemic with certified community behavioral health clinics receiving $250 million. SAMHSA gets $50 million for suicide prevention, and $100 million in flexible funding to address mental health, substance use disorders and providing resources to youth and the homeless during this time.
    • $200 million to the Centers for Medicare and Medicaid Services (CMS) with $100 million to support additional infection control surveys for facilities that house populations that are at high risk from contracting and having severe illness from COVID-19.

Human Services

  • $6.3 billion overall to the Administration for Children and Families (ACF). This funding will go to a number of human services programs including $3.5 billion for the Child Care and Development Block Grant to provide immediate assistance to childcare providers.
  • $45 million in grants to states for child welfare services.
    • As ACF increases flexibility in services for the most vulnerable, the legislation will help backfill this response by providing $45 million to family violence prevention and services including for family violence shelters and $2 million for the National Domestic Violence Hotline. Funding for the most vulnerable will also include $25 million for immediate assistance to programs providing services and housing for runaway and homeless youth. The Administration for Community Living will also receive $955 million to provide resources for aging and disability services programs including senior nutrition, home and community-based supportive services, family caregivers, elder justice and independent living.
  • $1 billion to the Community Services Block Grant to help local community-based organizations that provide a wide range of social services and emergency assistance for those with the highest need.


  • $1.4 billion for deployments of the National Guard. This level of funding will sustain up to 20,000 members of the National Guard, under the direction of the governors of each state, for the next six months in order to support state and local response efforts.
  • $932 million allocated to the Army National Guard for response efforts both domestically and internationally.
  • $557 million allocated to the Air National Guard for response efforts both domestically and internationally.

Technology/Health Care/Biomedical

  • Directs the secretary of HHS to consider ways to encourage the use of telecommunications systems, including for remote patient monitoring and other communications or monitoring services by clarifying guidance and conducting outreach.


  • $30.75 billion for an Education Stabilization Fund for states, school districts and institutions of higher education for costs related to coronavirus to be distributed as follows:
    • Elementary and Secondary Education: $13.5 billion available for formula grants to states, which will then distribute 90% of funds to local educational agencies (LEAs) based on their proportional allocation of ESEA Title I-A funds. State education agencies can reserve up to 10% of funds for emergency needs as determined by the state. Funds to LEAS can be used for coronavirus-response activities, such as planning for and coordinating during long-term school closures; purchasing educational technology to support online learning for all students served by the LEA; and additional activities authorized by federal elementary and secondary education laws.
    • Governors: Each state will receive a share of $3 billion for governors to allocate at their discretion for emergency support grants to LEAs and institutions of higher education (IHEs) that have been most significantly impacted by the coronavirus. 
    • Higher Education: $14.25 billion for emergency relief for Institutions of Higher Education to respond to the coronavirus. 90% of funds via a formula base, 75% on its share of Pell FTE and 25% on non-Pell FTE, excluding students who were exclusively enrolled online prior to coronavirus. At least 50% of institutional funds must provide emergency financial aid grants to students that can cover eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care and childcare. Remaining institutional funds may be used to defray expenses for IHEs, such as lost revenue and technology costs associated with a transition to distance education.



  • $25 billion for nation’s transit systems. Distributed through existing formulas including the Urbanized Area Formula Grants  and Formula Grants for Rural Areas  using the fiscal year 2020 apportionment formulas. Funds are eligible to cover operating expenses of transit agencies related to the response to coronavirus.

Justice/Public Safety

  • $850 million in Byrne/JAG funding formula grants to states for continuation of criminal justice programs.
  • $2 million for justice information sharing technology. Expands videoconferencing abilities for prison health care and criminal proceedings.


  • $400 million in election security grants to prevent, prepare for and respond to the coronavirus in the 2020 federal election cycle. States must provide an accounting to the Election Assistance Commission of how the funds were spent within 20 days of any 2020 election.