Gov. Brian Kemp announced the next phase of the Congress-passed CARES Act on on Monday. Major pieces of the CARES Act have already been rolled out – checks to individuals and families, a boost in unemployment benefits and small business loans among others – but the next phase, Title V, created the Coronavirus Relief Fund (CRF) specifically to provide financial assistance to state and local governments.
The CRF was designated some $150 billion in direct aid for state and local governments running short on revenue because of the impact of the virus. Now, that money is beginning to get to its destination. Georgia was allotted $4.1 billion based on the funding formula in the CARES Act and the Treasury directed up to 45 percent of that funding could be sent to local governments at the discretion of the governor if the funds qualify as “a necessary expenditure” incurred due to the public health emergency.
“The plan for CRF allocations and disbursements is a phased, measured approach,” said Governor Kemp. “It is critical that funding be released to cities and counties experiencing an immediate need as quickly as possible. It is also important that funding be disbursed equitably, but with the knowledge that some of our hardest-hit communities will need more assistance than others. I encourage cities and counties to work together to address expenses or challenges that cross jurisdictional lines.”
Municipalities with populations over 500,000 received direct allocations – in Georgia this means five local governments in and around Atlanta – leaving $1.2 billion remaining to be divvied across the state.
The governor’s office will limit the first phase of funding distribution to 30 percent of the $1.2 billion, which must be spent by September or it will be reallocated. Local governments will generally need to provide documentation to prove the expenditures qualify as part of the program. The Treasury specifically stated that “funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify as an eligible expenditure.”
These revenue shortfalls will likely begin to get a lot of attention over the next few months as fiscal years roll over and difficult decisions on services begin to be made. The state legislature just passed its budget last week and will go into effect later this week. Education funding took a big hit and municipalities may be expected to help pick up the slack – but there will be no relief there.
“No economic policy can fully end the hardship so long as the public health requires that we put so much of our commerce on ice,” Senate Majority Leader Mitch McConnell said in a speech on the Senate floor when the CARES Act passed. “This isn’t even a stimulus package. It is emergency relief. Emergency relief. That’s what this is.”
As fiscal year budgets roll over, that emergency relief will certainly start being needed more and more by local municipalities. And there still may be cuts in services unseen in some time.
