MUNICIPALITIES SEEK "CARES" ACT CLARIFICATION TO ENSURE SMALLER CITIES AND VILLAGES RECEIVE VITAL FUNDING
Municipalities across the nation are seeking clarification regarding the Coronavirus Response Fund for states and local governments created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The CARES Act designates funds from the Coronavirus Response Fund for states and local governments with populations over 500,000. The understanding was that smaller local governments that did not meet that population threshold would receive funds from the state's share directly.
However, the actual bill language includes a clause in the language defining how local governments use those funds that many worry could restrict a state from disbursing funds at all to local governments with a population under 500,000.
During a call with local governments and state leagues this week, a U.S. Treasury official confirmed that states can grant funds to local governments so long as those funds are used in the same way as it is used by the states as outlined in the statute.
However, there is now concern that the language defining how those funds could be used is too restrictive. The U.S. Treasury is reviewing the language and says it will provide a final determination and guidance on this issue.
The National League of Cities is leading lobbying efforts on Capitol Hill requesting that that the next COVID-19 response bill include direct stabilization funding to those smaller local governments, or that the threshold be lowered for direct funding through the Coronavirus Response Fund to local governments with smaller populations so they can receive funds directly.
We urge our members to call their members of Congress and echo this request. Without direct funding, smaller local governments will be unable to continue providing critical services to their residents during this time of crisis.