Stimulus Funding Under the Biden Administration
Stimulus Funding: Predictions for State and Local Government
On December 27th, 2020, the stimulus package known as the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) was signed into law to provide additional economic relief to Americans struggling from the effects of the COVID-19 pandemic. Notably for state and local governments, CRRSAA provided relief funding for specific public services such as education, public health, transportation, and broadband. While this financial assistance was much needed to help keep public transit agencies afloat and to help bridge the digital divide in rural communities, CRRSAA did not include any flexible direct aid to state and local governments like the CARES Act’s $150 billion Coronavirus Relief Fund.
However, additional funding to state and local governments has been a priority of the incoming Biden administration. On January 14, 2021, President-elect Joe Biden gave a speech outlining his plan for additional coronavirus stimulus package funding, termed the “American Rescue Plan.” Biden’s plan is estimated to cost about $1.9 trillion, which, while slightly smaller than the CARES Act’s $2.2 trillion price tag, is notably larger than the CRRSAA’s $900 billion of funding. The American Rescue Plan includes additional appropriations for stimulus checks, unemployment benefits, as well as funding for K-8 school reopenings, public transit, and vaccine distribution. Significantly, President-elect Biden’s bill would also allocate $350 billion in direct aid to state and local governments, which more than doubles the $150 billion provided in direct aid by the CARES Act’s Coronavirus Relief Fund (CRF).
Comparison with the CARES Act
This renewed focus on state and local aid by the Biden administration is welcomed as these governments continue to grapple with budget shortfalls over their upcoming fiscal year. While there are few details yet describing the $350 billion to state and local governments, we can expect that the funding mechanism will be like that used by the Coronavirus Relief Fund or may simply add the funds into the existing CRF. The CARES Act’s CRF provided direct allocations to states, territories, and those local governments with at least 500,000 residents using a population-based formula. Most states passed a portion of their funds down to small- and medium-sized local governments with populations under 500,000, with additional requirements attached based on the state’s priorities. The U.S. Department of the Treasury’s guidelines were broad, requiring only that the expenditures be necessary due to the COVID-19 emergency, not already accounted for in the agency’s budget, and incurred before the end of the year.
The original round of CRF allocations has been crucial in allowing state and local governments to respond nimbly to the pandemic. The few strings attached to this funding meant that state and local governments could move quickly to spend these funds on COVID responses, from updating government websites to implementing new communications platforms to quickly reach citizens with any important news regarding the COVID-19 pandemic response.
As we await more details on President Biden’s “American Rescue Plan,” based on criticism of the CARES Act for allowing too much abuse as a result of its rapid enactment, complexity, and new programs, we can expect that the American Rescue Plan will have additional requirements. Possible additional requirements may include fraud risk assessments, collecting additional use data, and additional oversight.
Additional Funding in Biden’s Plan
In addition to the direct funding to state and local governments, Biden’s plan includes $20 billion to tribal governments, $20 billion to public transit agencies with decreased ridership rates, and $130 billion for school reopenings. While there is no funding directly earmarked for state and local IT, these purchases would likely be eligible expenses under state and local government aid. Moreover, $9 billion is included for the federal Technology Modernization Fund (TMF), created in 2017 to give federal agencies funds to use technology to improve delivery of public services. This is a very large boost to the TMF from its $25 million appropriation in the FY 2021 federal budget, which is a positive sign that the incoming administration is willing to provide needed funding to update lagging IT infrastructure.
Next Steps
The Granicus Grants Support program is available to help state and local governments apply for COVID relief funds, including remaining CARES Act funding, recently passed CRRSAA funding, future stimulus package funds such as the “American Rescue Plan,” and all regularly occurring grant programs. Granicus can help your agency navigate the stimulus funding landscape, understand your jurisdiction’s stimulus allocations, and strategies for how best to access these funds. Contact your Granicus representative to learn more about accessing stimulus funds for your civic engagement projects!