Capitol Buzz
February 11, 2021
Early Version of Federal COVID Relief Package Includes State and Local Aid

Earlier this week, the U.S. House Oversight and Reform Committee released legislation on the state and local government aid section under the federal COVID-19 emergency aid reconciliation package. The National League of Cities is supportive of the bill as written.

Main points for cities, towns, and villages:
  • $350 billion in total for all municipalities, counties, states, tribes, and territories. Of that amount,
  • $130 billion is set-aside for local governments, equally divided between municipalities and counties.
  • The $65 billion for municipalities will be allocated to all 19,000 cities, towns, and villages according to a modified Community Development Block Grant formula. Under that formula:
  • $45.5 billion will be split among all municipalities that are designated CDBG entitlement cities (generally cities with populations above 50,000)
  • $19.5 billion will be split among cities not designated CDBG entitlement cities (generally cities with populations below 50,000 residents)
Of the remaining funds:
  • $195 billion for states and the District of Columbia
  • $65 billion for counties
  • $20 billion for tribes
  • $4.5 billion for territories
Additional details
  • No deadline for spending down funds
  • Eligible expenditures will include replacement of lost revenue
  • The U.S. Treasury Department will allocate funds in similar fashion to CDBG.
  • Funding for CDBG entitlement cities (generally above 50,000 pop.) will be determined by the CDBG formula.
  • Funding for non-entitlement cities (generally below 50,000 pop.) will be allocated based on population
Next Steps
  • The Oversight and Reform Committee will vote on the state and local aid section, including amendments, this Friday starting at 12:00 noon. Following passage, the section will be delivered to the House Budget Committee to be assembled into the broader emergency aid package. 
  • Other sections that are likely to get Committee votes this Friday include the transportation assistance section and the housing assistance section, both of which have NLC's support.

ACTION STEP: The National League of Cities (NLC) is working to ensure this legislative text stays in the bill through every stage. The NLC has prepared a letter for distribution to the Oversight and Reform Committee and is inviting municipal officials to sign on. If you are interested please consider signing on to the NLC's letter in support of the proposed $350 billion in aid to states, cities, counties, tribes, and territories. You can read the letter and add your organization's name here. Please sign by 8am EST Friday 2/12.