State and Local Governments

Assistance for State and Local Governments

The CARES Act provides $150 billion in direct assistance for domestic governments.  The Coronavirus Relief Fund assistance is provided to state governments.  Pennsylvania will get $4.964 billion split 55/45 between state and local governments.

What can it be used for?

It may be used for necessary expenditures incurred due to the COVID-19 public health emergency or state and local expenditures not accounted for in the most recent approved budget.  It only applies to expenditures incurred between March 1 and December 30, 2020.  Coronavirus Relief Fund payments may not be used to directly account for revenue shortfalls related to the COVID-19 outbreak.  Such funds, however, may indirectly assist with revenue shortfalls in cases where expenses paid for by the Coronavirus Relief Fund would otherwise widen the gap between government outlays and receipts.  For instance, if $3 billion in Coronavirus Relief Fund assistance is sent to a government with revenues that are $10 billion lower than expected and $5 billion in new COVID-19-related expenses, that assistance will reduce the fiscal gap (from $15 billion to $12 billion) by the same amount regardless of whether it applies to revenues or spending.  Only in cases where governments have revenue shortfalls and less related spending than the program provides are governments limited by the eligible purpose restrictions.  For instance, in that same example, but with no new COVID-19-related expenses, the government could not use Coronavirus Relief Fund assistance despite its decrease in revenues.

How can a state, territory, or local government unit apply?

The Treasury Department will automatically award each state its share within 30 days.  Local governments serving a population of at least 500,000, as measured in the most recent census data, may elect to receive assistance directly from Treasury.  Direct assistance must be applied for by the local government, and they need to provide certification from their chief executive that the money is being used for an eligible purpose (i.e. necessary expenditure related to COVID-19, unaccounted for in the most recent budget, spent between March 1 and December 31, 2020).

 

Community Development Block Grants

The CARES Act provides $5 billion of Community Development Block Grants (CDBG).  In total, Pennsylvania was awarded $112,783,845 through the CDBG provisions of the CARES Act.  The funding announced represents $2 billion of the overall $5 billion provided for CDBG.  The additional CDBG awards will be distributed within 90 days by the Secretary of Housing and Urban Development (HUD) to the communities that are hardest hit by COVID-19.

Grantees should coordinate with local health authorities before undertaking any activity to support state or local pandemic response.  Grantees may use CDBG funds for a range of eligible activities that prevent and respond to the spread of infectious diseases such as the coronavirus disease 2019 (COVID-19).  HUD has issued additional guidance on eligible activities.  That information can be found HERE.

Last Updated: April 2, 2020