State budget deal uses federal aid to compensate for cuts to local governments
Counties and other local governments will not suffer deep cuts in state aid during this budget year, under an agreement announced between Gov. Gretchen Whitmer and legislative leaders Monday evening.
The deal includes withholding $97 million from the FY20 August revenue sharing payment for local governments —
$53 million of which was slated for counties
However, $150 million from the federal Coronavirus Relief Fund will be allocated to local governments for any COVID-19 related expenses. This is approximately 1.5 times the amount allocated for the August revenue sharing payment.
The $150 million will be divided up based on the current percentage of revenue sharing payment and not on a first come, first served basis. This appropriation is above and beyond the $200 million from the fund for April and May public safety and public health expenses and the additional $100 million for hazard pay that is appropriated by
Senate Bill 690
MAC anticipates more guidance from the Department of Treasury on how to access these funds in early July. An announcement of another webinar is expected later this week.
Combined with other outlays to K-12 schools, colleges and universities and public safety and Medicaid spending, the agreement would commit $3 billion of the $3.1 billion the state received via the federal CARES Act this spring.
“Obviously, we are pleased to see state leaders recognize the need to protect critical front-line services that counties provide,” said Stephan Currie, MAC executive director. “It might not be Christmas in July, but it’s most welcome news. Of course, now the work turns to the upcoming state budget year that starts Oct. 1, where another multi-billion-dollar deficit is looming.”