Cities Continue to Receive Pandemic-Related Federal Funding
The federal government began providing cities federal funding in 2020 for the purpose of responding to the public health crisis. Cities have received funding from the following two programs...
Cities collectively received nearly$2 billion under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020.
The CARES Act requires that cities use the funding to cover costs incurred from March 2020 through December 2021 related to the COVID-19 public health emergency, such as the following:
American Rescue Plan Act
Cities collectively received$8.2 billionunder the American Rescue Plan Act in 2021 and 2022.
Cities received the American Rescue Plan Act funding in two tranches, with 50 percent provided from May 2021 through July 2021 and the other 50 percent provided at least 12 months thereafter.
The American Rescue Plan Act requires that cities use the funds to cover costs incurred from March 2021 through December 2024, with all amounts expended by December 2026, to address a variety of COVID-related expenditures, such as the following:
The Impact of This Additional Funding on Fiscal Health Will Vary by City
In addition to differences in the amounts received, variances among cities in the timing, use, and reporting of federal COVID-19 funding can affect the portrayal of fiscal health.
Scenario 1: One city received its entire CARES Act allocation of $800,000 in May 2020, which affects the indicators reported for fiscal year 2019-20. Another city received its allocation of $800,000 in September 2020, which affects the indicators reported for fiscal year 2020-21.
Scenario 2: One city used $500,000 for Revenue Replacement, thereby sustaining its general fund reserves. Another city used $500,000 for Paying Essential Workers, thus not affecting its general fund reserves.
Scenario 3: One city reported receipts of $700,000 in its General Fund thereby increasing general fund revenues. Another city reported receipts of $700,000 in a city fund other than its General Fund would not affect general fund revenues.
Refer to the following websites for information on the availability, amount, timing, and use of COVID-19 federal funding.