Pandemic government relief: Details, allocations provided

By Ken Tysiac

State, local, territorial, and tribal governments will have flexibility to apply Coronavirus State and Local Fiscal Recovery Funds to meet their own needs, Treasury revealed Monday.

Treasury released details on how governments can use the $350 billion in emergency funds established by the American Rescue Plan Act of 2021, P.L. 117-2. The funds are designed to be used to respond to acute pandemic response needs, fill revenue shortfalls among state and local governments, and support the communities and populations hardest hit by the coronavirus pandemic.

Eligible governments will be able to access funding directly from Treasury, which provided a list of individual government allocations. The full interim final rule describing the implementation has been posted on Treasury’s website.

In addition to allowing for flexible spending up to the level of their revenue loss, the rules are designed to permit recipients to use funds to:

  • Support public health expenditures by funding COVID-19 mitigation efforts, medical expenses, behavioral health care, and certain public health and safety staff;
  • Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector;
  • Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic;
  • Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service in critical infrastructure sectors; and
  • Invest in water, sewer, and broadband infrastructure, making investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.

The funding allocates $195.3 billion to the states and the District of Columbia; $65.1 billion to counties; $45.6 billion to metropolitan cities; $20 billion to tribal governments; $4.5 billion to territories; and $19.5 billion to nonentitlement units of local government.

For local governments, half of the funding is expected to be delivered this month, with the remainder delivered 12 months later. States that have experienced a net increase in their unemployment rate of more than two percentage points from February 2020 to the latest available data as of the date of certification will receive their full allocation of funds in a single payment. Other states will receive funds in two equal payments.

Governments of U.S. territories will receive a single payment, and tribal governments will receive two payments, with the first payment available in May and the second payment, based on employment data, to be delivered in June 2021.

Treasury’s interim final rule identifies many ineligible uses, including funding debt service, legal settlements or judgments, and deposits to rainy day funds or financial reserves. More information is available in a fact sheet posted on Treasury’s website.

Ken Tysiac ( is the JofA’s editorial director.

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