Many local units of government have received millions from the federal government. Some of the recovery funds money is supposed to go to first responders. Many of our local units of government are NOT providing this money to first responders. Put pressure on your local officials as some of these funds should also be distributed to you.
The $350 billion included in the American Rescue Plan (HR 1319) is for the creation of the new State and Local Coronavirus Relief Fund to keep first responders, frontline health workers, and other providers of vital services safely on the job as states, local governments, Tribes, and territories roll out vaccines and rebuild economies. Local governments get the funds to use at their discretion, with prescribed parameters including funding hazard pay for police officers and other first responders.
Learn more about the funds in the two press releases below.
Treasury Launches Coronavirus State and Local Fiscal Recovery Funds to Deliver $350 Billion
Aid to state, local, territorial, and Tribal governments will help bring back jobs, address pandemic’s economic fallout, and lay the foundation for a strong, equitable recovery
WASHINGTON — On May 10, 2021, the U.S. Department of the Treasury announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for state, local, territorial, and Tribal governments. Treasury also released details on the ways funds can be used to respond to acute pandemic-response needs, fill revenue shortfalls among state and local governments, and support the communities and populations hardest hit by the COVID-19 crisis. Eligible state, territorial, metropolitan city, county, and Tribal governments will be able to access funding directly from the Treasury Department in the coming days to assist communities as they recover from the pandemic.
“Today is a milestone in our country’s recovery from the pandemic and its adjacent economic crisis. With this funding, communities hit hard by COVID-19 will be able to return to a semblance of normalcy; they’ll be able to rehire teachers, firefighters, and other essential workers – and to help small businesses reopen safely,” said Secretary Janet L. Yellen. “There are no benefits to enduring two historic economic crises in a 13-year span, except for one: We can improve our policymaking. During the Great Recession, when cities and states were facing similar revenue shortfalls, the federal government didn’t provide enough aid to close the gap. That was an error. Insufficient relief meant that cities had to slash spending and that austerity undermined the broader recovery. With today’s announcement, we are charting a very different – and much faster – course back to prosperity.”
While the need for services provided by the state, local, territorial, and Tribal governments has increased —including setting up emergency medical facilities, standing up vaccination sites, and supporting struggling small businesses—these governments have faced significant revenue shortfalls as a result of the economic fallout from the crisis. As a result, these governments have endured unprecedented strains, forcing many to make untenable choices between laying off educators, firefighters, and other frontline workers or failing to provide services that communities rely on. Since the beginning of this crisis, state and local governments have cut over 1 million jobs.
The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each jurisdiction to meet local needs—including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis. Within the categories of eligible uses listed, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities. In addition to allowing for flexible spending up to the level of their revenue loss, recipients can use funds to:
- Support public health expenditures, by – among other uses – funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, mental health, and substance misuse treatment, and certain public health and safety personnel responding to the crisis;
- Address negative economic impacts caused by the public health emergency, including by rehiring public sector workers, providing aid to households facing food, housing, or other financial insecurity, offering small business assistance, and extending support for industries hardest hit by the crisis
- Aid the communities and populations hardest hit by the crisis, supporting an equitable recovery by addressing not only the immediate harms of the pandemic but its exacerbation of longstanding public health, economic and educational disparities
- Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service during the pandemic; and,
- Invest in water, sewer, and broadband infrastructure, improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and expand access to broadband internet.
Insufficient federal aid and state and local austerity under similar fiscal pressures during the Great Recession and its aftermath undermined and slowed the nation’s broader recovery. The steps the Biden Administration has taken to aid state, local, territorial, and Tribal governments will create jobs and help fuel a strong recovery. And support for communities hardest hit by this crisis can help undo racial inequities and other disparities that have held too many places back for too long.
For an overview of the Coronavirus State and Local Fiscal Recovery Funds program including expanded use of eligible uses, see the fact sheet released today. Find additional details on the state, local, territorial, and Tribal government allocations on the Coronavirus State and Local Fiscal Recovery Funds Webpage.
“Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service during the pandemic;”
$350 Billion Slated for State, Local Governments in American Rescue Plan
On March 11, 2021, President Joe Biden signed into law H.R. 1319, the American Rescue Plan Act of 2021. The $1.9 trillion stimulus plan passed in the U.S. House of Representatives by a 220-211 vote on March 10, 2021, and in the Senate by a narrow 50-49 vote on March 6, 2021.
The American Rescue Plan will provide $350 billion in payments to U.S. territories, states, and local and tribal governments as crucial assistance for budgets depleted by COVID-19. Of the amounts to be provided to states and local governments, states will receive 60 percent and local governments will receive 40 percent of the distributions. Below is a breakdown of how payments will be directed.
- Coronavirus Local Fiscal Recovery Fund – $130.2 billion. Local governments will receive $130.2 billion in aid to be split among counties, metropolitan cities, and nonentitlement units of local government, as follows:
- Counties will receive $65.1 billion in population-adjusted payments based on each county’s share of the U.S. population, with additional adjustments for Community Development Block Grant (CDBG) recipients.
- Metropolitan cities will receive $45.57 billion in payments.
- Nonentitlement units of local government will receive $19.53 billion in payments distributed by individual states and funded by the U.S. Treasury. Each jurisdiction will receive population-adjusted payments based on such jurisdiction’s share of the state population, not to exceed 75 percent of its most recent budget as of Jan. 27, 2020.
Despite requests from states, counties, and cities for flexibility in the use of funds, the American Rescue Plan contains restrictions on the use of monies distributed from either of the fiscal recovery funds. Funds may be used only to cover costs incurred by each applicable jurisdiction by Dec. 31, 2024, for the following purposes:
- to respond to the public health emergency with respect to COVID-19 or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
- to provide premium pay to eligible workers including public safety officers of the state, territory or tribal government, metropolitan city, nonentitlement unit of local government, or county that are performing such essential work, or to provide grants to eligible employers that have eligible workers who perform essential work;
- for the provision of government services to the extent of the reduction in revenue of such state, territory or tribal government, metropolitan city, nonentitlement unit of local government, or county due to the COVID-19 public health emergency, relative to revenues collected in the most recent full fiscal year prior to the emergency (pending Treasury guidance stating otherwise, many organizations, including NACo, have interpreted the legislative text to allow for replacing revenue that was lost, delayed or decreased as a result of COVID-19); or
- to make necessary investments in water, sewer, or broadband infrastructure.
- Each state and territory will be required to certify to the U.S. Treasury that it will use any payment in compliance with the use of fund restrictions before any distribution is made. Once the U.S. Treasury receives this certification, the department must make payment to the certifying entity within 60 days. While further details from the U.S. Treasury are expected in the near future, the American Rescue Plan authorizes the department to withhold up to 50 percent of the amount allocated to each state and territory for a period of up to 12 months from the date on which the state or territory provided its certification. A second certification will be required before the withheld amount is paid.
- Counties, metropolitan cities, and states as agents for nonentitlement units of local government will not be required to complete certifications, and will instead receive funds in tranches, with the first tranche to be paid within 60 days of the American Rescue Plan becoming law, and the second tranche to be paid at least 12 months after the date on which the county, metropolitan city or state as an agent for nonentitlement unit of local government received its first payment.