Sneak Preview: Treasury Provides $350B Through Coronavirus Fiscal Relief Funds

(The following is excerpted from a recent Thompson Grants 360 article.) Eligible state, tribal, local and territorial governments now can request emergency funding allocations through the Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds. The American Rescue Plan Act (ARPA) (Pub. L. 117-2) authorized the payment of $350 billion to recipients to respond to acute pandemic response needs, fill revenue shortfalls among these governments, and support the communities and populations hardest-hit by the COVID-19 crisis.

The Fiscal Recovery Funds build and expand on permissible uses provided under the Treasury Department’s Coronavirus Relief Fund (CRF), which was established through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136). Recipients may request these funds through the Treasury Submission Portal, and they are subject to Office of Management and Budget uniform guidance requirements.

The funding amounts are as follows: states and the District of Columbia, $195.3 billion; counties, $65.1 billion; metropolitan cities, $45.6 billion; tribal governments, $20.0 billion; territories, $4.5 billion; and nonentitlement units of local government, $19.5 billion. Local governments that are classified as nonentitlement units will receive this funding from their state.

The Treasury Department plans to provide local governments half of their total funding through May and the rest by May 2022. U.S. territories, along with states that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020, will receive their full allocation in one payment, while other states will receive funds in two equal allocations. Tribal governments will receive two payments, one in May and one in June. These dollars may be used only to cover eligible costs incurred by recipients from March 3, 2021, through Dec. 31, 2024. Treasury notes that while CRF funds were intended to meet short-term needs, the Fiscal Recovery Funds are “intended to provide more general relief over a broader timeline.”

Consistent with the eligible uses detailed in sections 602(c)(1) and 603(c)(1) of ARPA, recipients may use these funds to:

• support public health expenditures by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
• address negative economic impacts caused by the public health emergency, including economic harm to workers, households, small businesses, impacted industries and the public sector;
• replace lost public sector revenue due to the pandemic;
• 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 in critical infrastructure sectors”; and
• invest in water, sewer and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and expand access to broadband internet.

(The full version of this story has now been made available to all for a limited time here.)

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