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Flywheel FOCUS: Coronavirus State and Local Fiscal Recovery Funds

Flywheel FOCUS:  Coronavirus State and Local Fiscal Recovery Funds

Flywheel FOCUS: Coronavirus State and Local Fiscal Recovery Funds

With the passage of the American Rescue Plan Act on March 11, state and local governments were set to receive a total of $350 billion to respond to the COVID-19 public health emergency and its negative economic impacts through two programs: the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund. Although the bill was signed two months ago, the U.S. Department of Treasury had sixty days to determine the specific allocations that each unit of government would be receiving. Yesterday afternoon, those allocations were finally released, meaning that state and local governments will now be able to access these funds.

In general, there is wide flexibility for governments to use these funds toward various needs related to public health and economic relief. There are four major categories toward which Fiscal Recovery Funds may be used: (A) to respond to or mitigate the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts; (B) to cover costs incurred as a result of such emergency; (C) to replace revenue that was lost, delayed, or decreased (as determined based on revenue projections as of January 27, 2020) as a result of such emergency; or (D) to address the negative economic impacts of such emergency.

The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each government to meet local needs—including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis. These funds can also be used to make necessary investments in water, sewer, and broadband infrastructure. More detailed guidance about the use of these funds is available in the Dept. of Treasury's Interim Final Rule, which was released yesterday.

The Coronavirus State Fiscal Recovery Fund (CSFRF) provided $195.3 billion to the fifty states and the District of Columbia, with each state receiving a set payment of $500 million and additional funds based upon their respective average number of unemployed persons during a certain period of the pandemic. It also provided $20 billion for tribal governments and $4.5 billion for the territories. Funding allocations from the CSFRF are available below, with the exception of tribal allocations, which are still being worked out. There is more information about funds for tribal governments available here.

In addition to the funding for states, tribes, and territories, there is also a total of $130.2 billion in the Coronavirus Local Fiscal Recovery Fund (CLFRF) available for counties, metropolitan cities, and non-entitlement units of local government.

Counties will receive a total of $65.1 billion under the Coronavirus Local Fiscal Recovery Fund. An allocation table for counties is available here. Metropolitan cities will receive a total of $45.6 billion as part of the CLFRF. An allocation table for those cities is available here. Eligible local governments that are classified as non-entitlement units are set to receive a total of $19.5 billion, and should expect to receive their funding through their applicable state government. Non-entitlement units are generally local governments with populations of less than 50,000. Allocations for those units of government are available here.

Many state and local governments are already working to determine how these funds will be spent. With many pressing priorities, there are a lot of different ways that governments look to leverage these funds in responding to the public health emergency and its subsequent economic impacts.

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