May 06, 2020

Gillibrand, Schumer, Jones, Manchin, Brown, Bennet, Peters Announce Legislation To Deliver Direct Federal Relief Funding To Local Governments Responding To And Recovering From Coronavirus Pandemic

Decreasing Revenues During The Coronavirus Pandemic Have Left Local Governments Strapped; Dedicated Federal Funding for Local Communities Would Provide Necessary Relief for Lost Revenues, Increased Costs And Help Avoid Local Tax & Fee Increases; The Direct Support for Communities Act Will Complement Direct Relief to States and Governors

U.S. Senators Kirsten Gillibrand (D-NY), Chuck Schumer (D-NY), Doug Jones (D-AL), Joe Manchin (D-WV), Sherrod Brown (D-OH), Michael Bennet (D-CO), and Gary Peters (D-MI) today announced a plan to provide local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the COVID-19 emergency. The Direct Support for Communities Act would complement direct relief to states, which is also vital in this crisis.  

Concerned about the layoffs of public health care workers, firefighters, police, sanitation workers, teachers, and other vital public servants across the country, the senators are fighting to ensure that all counties, cities, towns, and villages — regardless of size — have the financial resources necessary to continue to provide these critical services. The direct relief will help local governments avoid local tax and fee increases that will put more of a burden on already cash-strapped families and businesses in this crisis.

“Our local governments are facing unprecedented financial hardship, as the COVID-19 outbreak has caused costs to surge and revenue to dwindle. Direct federal relief for local governments is absolutely critical as they grapple with the economic fallout from the COVID-19 pandemic. This smart and necessary proposal will ensure local governments have the resources to pay our first responders, health care workers, teachers, and public servants, and can continue serving our communities without raising taxes or fees. I will do everything in my power to ensure that this proposal is included in the next economic relief package,” said Senator Gillibrand.

“Local governments are hamstrung trying to deal with lost revenue and mounting costs in the face of the pandemic,” said Senator Schumer. “Under our proposal, counties, cities, towns, and villages of all sizes could count on direct, guaranteed financial relief, instead of having to layoff vital workers, cut important services, or raise taxes and fees at absolutely the worst time. Local governments deserve nothing less than our strongest federal support, and I am doing everything I can to get significant and flexible federal aid to our states and local governments included in the next legislative package Congress considers.” 

“We need to ensure that state and local governments have the resources they need in order to respond to the economic and health care crisis caused by the coronavirus pandemic. So far, they’ve been largely left behind in the major relief efforts, all while struggling with rapidly declining revenues and a critical need for locally supported services like law enforcement, emergency response, and education. This emergency assistance would help provide relief for communities that have experienced lost revenues and increased costs, which would be crucial to their efforts to mitigate and respond to this crisis,” said Senator Jones.

“Local governments in West Virginia and across America are on the front lines of the COVID-19 pandemic, caring for their communities and businesses, but I continue to hear from mayors and county leaders that they need more help to make up for lost revenues and make it through this pandemic,” said Senator Manchin. “Today I am proud to introduce legislation that will provide local governments with dedicated funding in the next COVID-19 pandemic emergency response funding package to ensure they can continue their commendable work during this crisis. I look forward to working my colleagues on both sides of the aisle to ensure passage.”

“Ohio communities have stepped up to meet this challenge and they’re doing it all while watching their tax dollars dry up,” said Senator Brown. “This direct relief is a lifeline for many of our local governments who are facing the impossible decision of choosing between tax hikes and laying off public safety officials like police officers, sheriffs and firefighters. We can’t let Ohio communities deal with the rippling effects of this crisis alone. We have to do more.” 

“Local governments on the front lines of addressing the pandemic are facing increased costs at the same time as they are dealing with collapsing revenues. Today’s bill is a first step toward ensuring that communities of all sizes receive their fair share of support to weather this once-in-a-century crisis,” said Senator Bennet. “We cannot allow massive cuts to critical services in counties, small towns, and cities across the country if we want to protect public health and address the economic challenges we face.”

“The Coronavirus pandemic has upended everyone’s lives. State and local governments in Michigan have been leading the response to this crisis on-the-ground, but they need immediate support to carry out essential responsibilities,” said Senator Peters. “This bill will ensure cash-strapped communities can continue vital functions, including public safety and emergency services. Michiganders deserve action and I’m proud to join this effort to ensure Michigan has the resources needed to get through this pandemic.”

Under the proposed bill, the local relief fund would be split 50/50, half committed to cities, towns and villages, and half committed to counties:

  • Of the portion allocated for cities, towns, and villages, 70% would go to Community Development Block Grant (CDBG) entitlement communities using the CDBG formula through the Department of Housing and Urban Development (HUD) to allocate the funding.  
  • The remaining 30% for cities, towns, and villages would be send to states, which would be required to sub-allocate the entire amount within 30 days to all non-entitlement communities in the state based on population.
  • The portion of emergency fiscal assistance for counties would be allocated across all counties based on population. The exception to that formula is that a current CDBG entitlement county would receive its entitlement amount if it is higher than what that county would receive under an allocation based on population.

Local governments would be able to use this federal relief to help address costs associated with lost revenues and respond to the pandemic, and would help avoid cuts to essential services or local tax and fee increases. This proposed formula for local fiscal relief is intended to be incorporated into a larger legislative package that will also include fiscal relief for state and tribal governments; retroactive availability to use the Coronavirus Relief Fund in the CARES Act for lost revenues; and other important matters.