Feds Reach Deal on $2 Trillion Stimulus Package: What It Means for Counties

The U.S. Senate today is expected to pass a massive $2 trillion stimulus package designed to keep the economy afloat amid the deepening COVID-19 pandemic. The U.S. House is likely to take quick action on the Senate bill and send it to President Trump for swift enactment.

The bill includes $150 billion for state and local stimulus funds; $500 billion lending fund for industries, local governments, and states; $367 billion for small business loans; $130 billion for hospitals; and $1,200 checks to most Americans. Unemployment insurance would be extended to four months, the benefits would be bolstered by $600 weekly and eligibility would be expanded to cover more workers.

The $150 billion for state and local governments is generally apportioned by population, but no state may receive less than $1.25 billion, regardless of its population. Maryland, for example, is eligible for approximately $2.34 billion in federal funding.

According to the latest draft of the legislation, only counties and cities with populations of at least 500,000 residents will be eligible for direct access to state and local stimulus funds, and any aid they receive is deducted from the amount otherwise available to their state’s government. This, too, is allocated by population, but eligible local governments may only receive 45 percent of the amount associated with their population.

To be eligible for federal funding, state expenditures must meet three conditions. First, they must be necessary expenditures related to the COVID-19 public health crisis. Second, they must not be accounted for in the state or local government’s most recently approved budget (as of the time of the law’s enactment). Finally, the expense must be incurred before December 30, 2020.

The National Association of Counties (NACo) pushed for all counties to have direct access to the local stimulus funds in order to aid local response efforts for COVID-19.

According to NACo:

The National Governors Association has requested at least $150 billion for state financial assistance:

  • As part of any State Stabilization Fund or other general financial support, we also respectfully request that America’s counties be eligible for direct assistance from the U.S. Treasury.
  • Our nation’s 3,069 counties employ approximately 3.6 million Americans (or more than one percent of the U.S. population).
  • As major employers and service providers across the country, counties provide essential public health, public safety and overall essential safety net services.
  • During this unprecedented pandemic, counties are also spending considerable financial resources to protect the health, safety and economic future of our local residents.
  • All at the same time that our revenues are expected to take a dramatic hit, especially those counties dependent on local sales taxes and other special use taxes.

Stay tuned to Conduit Street for more information.

Useful Links

Previous Conduit Street Coverage: Feds Move Quickly on Emergency Aid for Coronavirus Response

Previous Conduit Street Coverage: MACo Compiles List of Local Resources During COVID-19 Response

For up-to-date information and state resources regarding coronavirus, including confirmed case counts and clinician guidance, visit http://health.maryland.gov/coronavirus.

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