The federal Stimulus Package is a complicated policy that is rolling out in phases:
- Read an overview and analysis of the phases here.
- Read our analysis of the implications for Local and State Level Governments for Phase 3.5 here.
Phase I and II
Phase I and II of the Stimulus Package focus on immediate COVID-19 response and do not provide support for local and state level governments directly. Indirectly, increasing benefits for workers, like sick time and unemployment will impact state and local government expenditures.
Phase III provides support for local governments in two ways: providing funding to offset the costs of COVID-19 response, and providing funding and support for economic stabilization and development.
Pandemic Response Funds
COVID-19 response allocates $150 billion to state and local governments to help offset unanticipated costs associated with pandemic response.
- This funding is offered directly to state and local level governments through the Dept. of the Treasury.
- Funds are allocated proportionally based on the latest Census data and states are guaranteed at least $1.25 billion, no local matching required. West Virginia will receive the minimum payment of $1.25 billion.
- States will receive payment automatically and it is anticipated that West Virginia will see the funds toward the end of April.
- 45% of each state’s funding is set aside for local governments to apply for directly from the Treasury. In order to qualify, municipalities must have a population greater than 500,000 people, effectively excluding all WV municipalities. Any funding not claimed by municipalities is allocated to the state.
What this means: The state government will be responsible for making critical decisions about how to support both state and local level governments with the costs associated in responding to the current crisis. Local government officials seeking guidance on how to access funding to cover the unanticipated costs of responding to COVID-19 should contact the WV Municipal League or Sustainable Strategies.
Economic Stabilization and Development Funds
$5 Billion in Community Development Block Grant funds to local governments.
This funding comes through the Department of Housing and Urban Development (HUD) and includes funding for HUD to continue administering these grants. Because CDBG funding is generally fairly flexible, local governments can use this money to stabilize neighborhoods and provide housing in a variety of ways that might work best for their communities. This funding increase will be routed through the existing process for allocating CDBG funding and while no time frame has been announced on when they will become available, although some applicants have already received funding.
What this means: Local governments which are already accessing CDBG funding may find that they are pre-approved to receive additional funding. Local governments which have been investigating applying for CDBG funds may find that now is a good time to do so.
$1.5 billion in Economic Development Administration (EDA) grants.
EDA grants can be used to “support other locally-identified priorities for economic recovery.” In the past, qualified applicants have thought creatively about what these priorities might be and utilized this funding to address brownfield remediation, building rehab and reuse, and downtown redevelopment.
These grants may also offer an opportunity to leverage additional funding. Based on the impact of prior funding packages, EDA estimates leveraging an additional $20 billion in local and private investment and supporting more than 100,000 American jobs.
Funds are expected to be available to qualified applicants by April 30th, 2020. Specific application and qualification details are still in the works. For more information or support in applying for these grants, please contact: Tracy Rowan at email@example.com.
What this means: Local governments who feel their communities would benefit from EDA grants should work to coordinate with their Regional Development Office to assess community needs. We will keep you updated as more information becomes available about who will be eligible, what the timeline will look like, and how to apply.
Are you working on implementing these or other policy solutions related to local and state governments? We want to hear more about the work you’re doing and help you share important information.
Please contact Policy Coordinator Taylor Bennett at firstname.lastname@example.org.
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