State and Local Fiscal Recovery Fund

This new law provides the largest amount of direct federal aid ever to local governments. A total of $130.2 billion will be provided to cities and counties to use through December 31, 2024. The program will be administered by the U.S. Treasury Department.

Key provisions include:

  • Funding:​ Local governments will receive $130.2 billion (half cities/half counties). Cities will receive $65.1 billion, roughly 19 times the annual Community Development Block Grant (CDBG) allocation, although this money is NOT CDBG – it is a totally new program.
  • Allocation Structure:​ CDBG entitlement municipalities will receive funding based on the CDBG formula. Non-entitlement municipalities will receive funding based on their relative population as compared to other non-entitlement communities in their state, which will be administered by the state as an automatic pass-through.
  • Two-Year Funding:​ Half of a city’s allocation will be distributed to the city in 2021, and the second half in 2022. However, cities will have until December 31, 2024 to use these funds.
  • Timing of Receipt of Funds:​ Entitlement cities will receive their funds within 60 days of the date of enactment. States will receive their funds to distribute to non-entitlement cities within 60 days of the date of enactment, which they then must distribute to non-entitlement cities within 30 days (although the state may apply for two additional 30-day extensions, but only under strict requirements).
  • Eligible Uses:​ Eligible use of funds include the following. USCM will work with the Treasury Department to develop regulations to provide further guidance on these “use of funds”.

“USE OF FUNDS—Subject to paragraph (2), and except as provided in paragraphs (3) and (4), a metropolitan city, non-entitlement unit of local government, or county shall only use the funds provided under a payment made under this section to cover costs incurred by the metropolitan city, non-entitlement unit of local government, or county, by December 31, 2024.

“(A) to respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;

‘‘(B) to respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the metropolitan city, non-entitlement unit of local government, or county that are performing such essential work, or by 22 providing grants to eligible employers that have 23 eligible workers who perform essential work;

‘‘(C) for the provision of government services to the extent of the reduction in revenue of such metropolitan city, non-entitlement unit of 2 local government, or county due to the COVID– 3 public health emergency relative to revenues collected in the most recent full fiscal year of the metropolitan city, non-entitlement unit of local government, or county prior to the emergency;

‘‘(D) to make necessary investments in water, sewer, or broadband infrastructure.”

Resources

Important Updates

August 2nd, 2021: Bloomberg’s e311 Program will host a virtual workshop on federal assistance compliance on Monday, August 2nd, at 2:00pm ET. Please click here for more information on how to participate.  Click here for slides that outline the e311 Program.

July 22nd, 2021: The U.S. Department of Commerce has announced two new competitive grant programs available to local governments to promote local economic growth and development. These are being administered by Commerce’s Economic Development Administration (EDA). These grant programs include:

  1. The Build Back Better Regional Challenge (Click here for more information)
    The $1 billion Build Back Better Regional Challenge will provide a transformational investment to 20-30 regions across the country that want to revitalize their economies.
  2. The Good Jobs Challenge (Click here for more information)
    Through the Good Jobs Challenge, EDA is allocating $500 million to collaborative skills training systems and programs. Funds may also be used to provide wrap-around services for trainees.

July 19th, 2021: The U.S. Department of the Treasury has issued updated FAQs for its Coronavirus State and Local Fiscal Recovery Funds program. There is a single update to FAQ number 1.4 on page 2. Please click here for most recent FAQs.

June 28th, 2021: The U.S. Conference of Mayors has submitted its full public comments to Treasury regarding the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule. Click here to view the Conference of Mayors’ full public comments.

June 23rd, 2021: The U.S. Department of the Treasury has released its latest round of Frequently Asked Questions for the Coronavirus State and Local Fiscal Recovery Funds. These additional FAQs relate to assistance to small businesses, improvement of outdoor spaces (such as parks), crime prevention and response, and more. The new FAQs are dated 6/23/2021. Click here to view the updated FAQs.

June 17th, 2021: The U.S. Department of the Treasury has released new guidance on Recipient Compliance and Reporting Responsibilities for the State and Local Fiscal Recovery Funds Program. Click here to view.

June 17th, 2021: The U.S. Department of the Treasury has released its latest round of Frequently Asked Questions for the Coronavirus State and Local Fiscal Recovery Funds. These additional FAQs relate to broadband development, and are dated 6/17/2021. Click here to view the updated FAQs.

June 15th, 2021: The U.S. Conference of Mayors, the City of Boston, Chicago, Los Angeles, Montgomery County (MD), and the TCCFUI have submitted joint public comments to Treasury related to the broadband infrastructure provisions outlined in the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule. Click here to view the broadband infrastructure public comments.

June 8th, 2021: Today, the U.S. Department of the Treasury released its latest round of Frequently Asked Questions for the Coronavirus State and Local Fiscal Recovery Funds.

For More Information

Dave GattonDirector, Council on Metro Economies and the New American City
Ed SomersChief of Staff

Relief for Individuals and Families

Recovery Rebates to Individuals:​ Under the American Rescue Plan​, individuals with annual earnings of up to $75,000 AGI, joint filers earning $150,000 AGI, and heads of household earning $112,500 AGI will receive an additional $1,400 economic impact payment per individual. The $1,400 payment, when added to the $600 payment approved in last December’s stimulus package, equals the $2,000 that President Biden had promised he would deliver. These payments phase out completely for individuals earning $80,000 AGI, joint filers earning $160,000 AGI, and heads of households earning $120,000 AGI.

Earned Income Tax Credit: ​The bill raises the maximum Earned Income Tax Credit for childless adults to roughly $1,500. The bill lowers the minimum age to claim the EITC to 19, and eliminates the age cap for older workers.

Child Tax Credit:​ The new law increases the amount of the Child Tax Credit from $2,000 to $3,000 for families with children ages 6 to 17, and $3,600 for children under age 6. And the Child Tax Credit would be fully refundable.

Child and Dependent Care Tax Credit:​ The legislation also expands the Child and Dependent Care Tax Credit so households can receive up to $4,000 for one child and $8,000 for two or more children.

Immigration Provisions:​ Immigration status penalties are eliminated for several programs, including the Earned Income Tax Credit (parents with Individual Taxpayer Identification Numbers now will be able to receive EITC for their children), state and local funds, and rental and mortgage assistance.