2020 CARES Act Direct Economic Stimulus Funding

Published: May 06, 2020

Coronavirus (COVID-19) PandemicEconomic StimulusPolicy and Legislation

As part of the CARES Act, state and local governments will be receiving $150 billion in direct aid.

Updated on May 6, 2020

As state governments begin receiving the direct stimulus funds, there are still calls among state and local government leaders that the funding amount is not enough, and it will not reach enough entities that need assistance.

As noted, state governors have issued calls for additional funding in a subsequent stimulus package, although at this point it remains to be seen whether Congress will allocate more funds for states and localities. In April, the National Governors Association issued a statement calling for Congress to make additional funding available.

The Governors are not alone in this, as local government officials have also echoed similar sentiment. Especially considering only localities with populations of 500,000 are eligible for direct funding, the vast majority of cities and counties have been left out of the CARES Act stimulus. Along with the statement from the National League of Cities, the National Association of Counties, and the United States Conference of Mayors, other entities have made their needs known for additional funding. This includes more recent calls from the New York Delegation to the HouseCalifornia elected officials, and a group of Iowa mayors, among others.

However, some states have elected to make funding available for localities outside of those included in the CARES Act. Washington Governor Jay Inslee recently announced that the state would make $300 million available for local governments. Missouri will also be making over $500 million available to St. Louis and several counties. 

Several states have convened committees or working groups to advise and oversee the spending of these funds. Michigan Governor Gretchen Whitmer announced the formation of the COVID-19 Office of Accountability to oversee expenditures. North Carolina has announced funding allocations for specific needs, and Arkansas, which established a steering committee to oversee COVID response efforts, submitted an updated version of its program and initatives to the state's legislative council. 

 

Updated on April 22, 2020

Regarding the direct stimulus funding allocated for state and local government entities, much of the funds are still pending delivery. 

Although state and local governments are receiving $150 billion in direct aid, there have since been additional calls from officials that this will not be enough and the requirements for use of the funds are too restrictive.

Maryland Governor Larry Hogan, Chair of the National Governors Association (NGA), and Vice-Chair Governor Andrew Cuomo of New York have issued a joint statement calling for an additional $500 billion in aid to be made available for state and local governments. Additional SLED government officials have also issued similar calls for more funding, including Ned Lamont of Connecticut. Numerous state and local government organizations have also issued statements calling for robust, flexible relief from the federal government to fight the pandemic. The National League of Cities, the National Associations of Counties, and the United States Conference of Mayors issued a joint statement requesting an additional $250 billion for local governments.

On April 21, the US Senate approved a new bill that includes roughly $484 billion in funds. The bill includes sections providing support to the Paycheck Protection Program, additional resources for hospitals and health care providers, and funds for various loan programs. The House will vote on the bill on Thursday, and President Trump has indicated that he will sign it.

However, the bill does not include additional funding for states and localities. According to Senator Minority Leader Chuck Shumer, this was a priority, and Democrats will continue to fight for additional funding for state and local governments in future relief packages.

 

Published on April 14, 2020

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides $2 trillion in relief funding to the country, with $150 billion in direct aid allocated for state and local government entities. The funds will be made available to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic.

Funding will be allocated based on state population, with a minimum of $1.25 billion for all states. In addition to this funding for the states, $3 billion is reserved for U.S. territories and the District of Columbia and $8 billion is set aside for tribal governments. Within each state, local governments with populations of at least 500,000 as measured in the most recent census are also eligible for aid. Localities are permitted to claim 45% of the amount allocated for their own populations, while the state retains the other 55% of that allotment. Estimated funding totals for states and eligible localities is now available and provided in the attached spreadsheet.

These funds are available for costs that meet the following requirements:

  • Are necessary expenditures incurred due to COVID-19
  • Were not accounted for in the budget most recently approved as of the date of enactment of this section
  • Were incurred during the period that begins March 1, 2020, and ends Dec. 30, 2020

Funds are expected to be distributed to states by late April.

In preparation for receiving these funds, several states have organized task groups or advisory committees to develop plans for the best uses of the money, including Arkansas, Montana, and Indiana. As the funding is made available, more such groups may be formed to determined priorities for the funds.

Recently, there have been some arguments made that these funds are not sufficient to fully combat all the effects of the pandemic. Maryland Governor Larry Hogan, Chair of the National Governors Association, and Andrew Cuomo, the groups ranking Democrat, issued a joint statement calling for Congress to appropriate $500 billion specifically for states to meet budgetary shortfalls. Given that the $150 in direct aid had prescriptive requirements for usage, governors argue that there is not enough available to balance their budgets and account for deficits, and are requesting Congress amend the CARES Act to allow for greater flexibility.