President Signs Stimulus Package

 

Update: President signs third stimulus package, enacting $2 trillion in emergency spending for boost in COVID-19 response and to address financial impact. CARES ACT

Thank you to the many, many GFOA members who reached out to key Senate and House of Representatives offices on several key financial priorities for state and local governments. HR 748 The CARES Act passed the Senate late in the evening on Wednesday, March 25 and made it through the House on Friday. How did we fare in the package still under consideration? The CARES Act Provides (among many other funding provisions):

  • A $454 billion "Economic Stabilization Fund" that permits the US Treasury to "purchase obligations {of States, local governments, instrumentalities and political subdivisions of them} or other interests in secondary markets or otherwise" thus permitting the Federal Reserve to participate as an institutional investor in securities that mature in greater than 6 months. This fund also provides loans and loan guarantees to small businesses.
  • $150 billion in direct aid specifically for COVID-19 related expenses to states, tribal governments, territories and local governments over the population of 500,000 people. There is no direct language on aid to local governments under that population. The inspector general of the Treasury is charged with conducting oversight of receipt and distribution.
  • $130 billion in grants to health care providers to provide reimbursements and to supplement lost revenue to hospitals
  • $30.9 billion includes $13.5 billion for elementary and secondary education formula funding directly to states, to help schools respond to coronavirus and related school closures. Higher Education would receive $14.3 billion
  • $45 billion for FEMA. The funds are intended to help state and local efforts, including medical response and purchasing protective equipment. The breakdown includes:$200 million for shelter, food and services; $100 million in grants to firefighters for protective equipment, supplies and reimbursements; $100 million for enhanced sanitation at airport security checkpoints and other airport costs.
  • $100 million will go to correctional officer overtime, personal protective equipment and supplies, and inmate medical care and supplies. Another $850 million is designated for state and local law enforcement and jails through a grant program.
  • $30.9 billion includes $13.5 billion for elementary and secondary education formula funding directly to states, to help schools respond to coronavirus and related school closures. Higher education would receive $14.3 billion
  • $25 billion for transit providers through Federal Transit Administration (FTA) Transit Infrastructure Grants. Including states and local governments across the country, for operating and capital expenses. Funding will be distributed using existing FTA formulas.
  • $10 billion to maintain operations at our nation’s airports that are facing a record drop in passengers. Airport Improvement Program funds will be distributed by formula according to the Federal Aviation Administration.
  • The legislation does not address the mandated two weeks of sick leave and state and local governments exclusion of the refundable tax credit in the Second Stimulus Legislation

It's not done yet! Here are the next steps: Senate will send The CARES Act to the House of Representatives on Thursday, March 26. It is largely understood the House is in favor of the package and will vote to pass the bill. Timing on appropriations and Treasury funding will be established as soon as it is passed. GFOA will continue to monitor progress of this important legislation and development of the provisions as they develop.