Know The Federal Covid-19 Relief State wise

As part of the CARES Act that stipulates a $2.2 trillion relief fund for Covid-19, the federal government has allocated $150 billion to support states and local governments. Named as the Coronavirus Relief Fund, it is designed to make payments to states, local and tribal governments that have been fighting the pandemic. Find out what the state-wise relief amount has been mandated by the federal government and how this fund will work.

How will the $150 Billion Fund Work?

The US Department of the Treasury (Treasury) will be making payments from this fund to state governments and all eligible units of local governments, US Territories, the District of Columbia, and Tribal governments. The CARES Act mentions what these payments can be used for. Some of the key eligibility requirements for states and other governments to avail this fund are as follows:

• Necessary expenses incurred due to the public health emergency created by Covid-19
• Expenses not accounted in the current budget that was approved for the State or governments
• Expenses incurred during the period from March 2020 to December 2020

The amounts paid to the governments will be determined based on the jurisdiction’s population. Under the CARES Act, the Treasury has been guided to rely on the most recently available data from the US Census Bureau. The payments made to local governments within a state will be reduced from the amount that will be allocated to the state government.

Local Government Allocation

The types of local governments that can receive direct payments from the Coronavirus Relief Fund include:

• Counties
• Towns
• Municipalities
• Townships
• Villages
• Parishes
• Boroughs

This also includes other forms of local governments under the State level that have a population of over half a million. All eligible local governments are required to submit their eligibility certification before the due date set by the Treasury.

Tribal Government Allocation

The financial support provided to Tribal Governments will be based on the decisions made by the secretaries of the ‘Treasury’ and the ‘Interior and Indian Tribes’. The Treasury has already begun disbursing payments to tribal governments from the start of May 2020. These payments have been made based on their population. Payments have also been made to Indian tribes that submitted correct payment information.

Dividing the Relief Fund

It is also laid down in the Coronavirus Relief Fund that each state will be receiving a minimum of $1.25 billion. It is estimated that the most populated states of California and Texas will be getting at least $10 billion each. The following table lists the expected state-wise distribution of the $150-billion fund:

The federal Coronavirus Relief Fund provides state-wise fiscal support to state governments, local governments, tribal governments, tribes, and US territories to fight the Covid-19 pandemicAs already mentioned only those local governments will be eligible to receive payments that have a population of more than 0.5 million. If a local government doesn’t meet this condition, the fund will be allocated to the respective state government. All counties and cities that meet the minimum-population requirement will be getting funding based on the following formula:

• Multiply 45% of a state’s allocation by a local government’s share of the state’s population
• State governments will be getting 79% of the fund that has not been set aside for tribal governments and other territories
• Local governments are expected to receive the remaining 21% of the funds
• There are 16 states that don’t have any local government with eligible population and these state governments will be receiving their entire allocation

State and other governments and tribes continue to incur increasing costs in their growing efforts to contain the pandemic. The massive impact on economic activity has also adversely affected potential tax revenues.

This relief fund is expected to support state and local governments in various ways, most importantly in preventing:

• Layoff of state, local government, and tribal employees
• Reduction in public services
• Scaling back any government contracts

And other types of spending. If these governments are not protected against these challenges, the recession can worsen quickly. Tribes are at greater risk of financial distress because of their revenue model. Most tribes rely on businesses like casinos for most of their revenues for running programs like child care and public healthcare.

As the economy continues to decline rapidly, states, local governments, and tribes are suffering financially. It is expected that the federal government will announce another relief fund to support these governments and Americans affected by the coronavirus crisis.