The new bipartisan economic stimulus legislation, known as the CARES Act, was signed today by President Trump. In addition to worker and business protections, the bill contains significant new funding to help states address their immediate budget problems due to COVID-19.
Unlike past disasters, the federal government seems to be taking the approach of pushing funds to the states to address the crisis at the local level, rather than a top down effort. This position was reinforced today on a call hosted by the United States Corps of Engineers who emphasized a decentralized approach vs. centralized command and control.
While there is significant federal-level spending, including $1.5 billion to the Department of Defense for the expansion of military hospitals and expeditionary hospital packages, a massive amount of funding is going to states.
The centerpiece of the state aid is the $150 billion Coronavirus Relief Fund, which state, tribal, and local governments can use this year to meet costs connected to the virus. Each state will receive at least $1.25 billion, with more populous states such as California and Texas receiving over $10 billion each.
The bill also provides $45 billion for the Disaster Relief Fund, the primary funding source for FEMA disaster recovery programs, including direct federal assistance to states, municipalities, and tribes. Under Governor-requested Major Disaster Declarations – which currently exist in California, Iowa, Louisiana, New York, and Washington State, Florida and Texas – FEMA can provide their full suite of programming to assist in pandemic response.
Overall, the bill provides more than $12 billion in funding for HUD programs including $5 billion in Community Development Block Grants. Congress provides $5 billion for CDBG to cities and states. Of the total amount provided, $2 billion will be allocated to states and units of local governments that received an allocation under the FY20 formula. Another $1 billion will go directly to states and insular areas based on public health needs, the risk of transmission, the number of coronavirus cases, and economic and housing market disruptions. The remaining $2 billion will be allocated to states and units of local government based on the prevalence and risk of COVID-19 and related economic and housing disruptions resulting from coronavirus. (Source: National Low-Income Housing Coalition).
We are still reviewing this massive $2.2 trillion plan, but it seems more likely that states, not federal authorities, will be making many of the construction and purchasing decisions.
Stay tuned and stay safe.
Started on March 27, 2020 by Tom Hardiman