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5 But what exactly constitutes an acceptable expenditure is not detailed in the legislation. The CARES Act specified that CRF monies could only be used for “necessary expenditures incurred due to the public health emergency with respect to” COVID-19. State governments, however, can dedicate some or all of their CRF funds to local governments, and were initially encouraged to do so, though Treasury guidance includes no formal requirement or instruction. Sixteen states-Alaska, Arkansas, Connecticut, Idaho, Iowa, Louisiana, Maine, Mississippi, Montana, New Hampshire, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming-received funds only at the state level. Illinois received a total allocation of $4.9 billion, with $3.5 billion going to the state and $1.4 billion going directly to five counties and the City of Chicago. California received the largest share of CRF funds, comprising 11% of all state and local funding, followed by Texas (8%), Florida (6%), and New York (5%) respectively. The minimum state allocation is $1.25 billion, less any funds allocated to local governments. Of the $139 billion set aside for states and local governments, $111.4 billion is dedicated to states and the remaining $27.6 billion is allocated to local governments. Source: “Payments to States and Eligible Units of Local Government.” U.S. 3 Figure 1 shows CRF allocations for the 50 states, with the portion allocated to the state in blue and the total amount allocated to counties and cities within the state represented by an orange dot, with the dot size varying by the total amount of money set aside for local governments. 2 The number of local governments directly receiving CRF funds is a small fraction of the roughly 38,779 general-purpose governments in the United States.

Of the 171 eligible governments, 154 counties and cities were awarded funds. All general-purpose local governments with a population exceeding 500,000 were eligible, but were required to submit certification to the Treasury before April 17, 2020. While allocating aid based on population is a simple distribution formula to use, one shortfall is that it does not take “need” into consideration.Īny amount distributed to local government units was subtracted from the state government’s allocation. Territories, and tribal governments, and the remaining 93% (or $139 billion) was allocated to the 50 states based on population size, using the most recent Census data available. Of the $150 billion in CRF funds, the CARES Act set aside $11 billion specifically for the District of Columbia, U.S.

How Has the Treasury Department Apportioned CRF Money?Īlthough the CARES ACT did not address the full fiscal needs of subnational governments, it did provide $150 billion to them for unexpected, COVID- related expenses. The December 30 date is arbitrary and Congress could change it to ensure state and local governments fully utilize the Coronavirus Relief Fund program. Moreover, as we highlight in this report, changing guidelines from the Treasury Department have led to confusion and spending delays. This limit makes little sense given that the pandemic is ongoing (with second and third waves of spiking cases occurring). It is unclear why the deadline for spending CRF funds was set as December 30, 2020.

Expenses that are incurred between Maand December 30, 2020.

Expenses that were not accounted for in the state or local government’s budget that was approved as of Maand,.

Necessary expenses tied to the “public health emergency with respect to COVID-19”.

1 While governments have discretion over how to use the money, the funds can only be used for expenses that meet the following criteria: More specifically, the CARES Act appropriated $150 billion to the Coronavirus Relief Fund (CRF) so the Treasury Department can make payments to states, territories, local governments and tribal governments for COVID related expenditures. While the CARES Act mainly provided relief for individuals and businesses, it also set aside money to cover state and local governments’ unexpected COVID-19 related expenses.

To address the crisis, Congress passed a series of stimulus bills in March 2020, the largest being the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. State and local governments are facing significant budget gaps because of sharp revenue declines and increased spending demands. The COVID-19 pandemic has had unprecedented health, economic and fiscal consequences.

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