- Governors have demonstrated responsible, thoughtful stewardship of the federal coronavirus funding that they have received so far.
- CARES Act funds have been crucial to states’ ability to combat COVID-19. Governors put the $113.8 billion in CARES Act Coronavirus Relief Funds directly to work on vital and lifesaving human services: testing, health care, support for counties, cities and towns, economic and small business relief, and education.
- Delayed guidance and short deadlines have complicated this important work. Frequent changes to the guidance brought both flexibility and confusion.
- As states have long stated, they need the flexibility to cover lost revenue with CRF funds. Without a new package of state stabilization funding, it is critically important that states be permitted to spend these dollars into 2021 — with more flexibility to direct those funds where they are needed most.
- The parameters of a federal stabilization package for state and local governments are subject to the back and forth of the legislative process. What is beyond debate, however, is the real and pressing need to help state and local governments as they continue to help millions of Americans.
- The need for Congress to act is growing — coronavirus cases are rising in 38 states, and large employers are making significant layoffs, with nearly 900,000 people filed new unemployment claims filed last week alone. Without additional funds and increased flexibility from Congress to use these funds, some states and territories will be forced to cut services and consider substantial layoffs.
- Failure from Congress to provide relief will delay America’s full economic recovery. Federal Reserve Chair Jerome Powell recently said, “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.”
- Every dollar spent in state aid goes a long way. According to Moody’s, each dollar spent supporting state and local government during a recession yields $1.39 in overall benefit to the economy.
- That’s why NGA is calling for a robust and multi-year recovery plan for states and territories. With increases in COVID-19 cases emerging, the pressing need to fund state and local governments response and recovery work grows by the day.
NGA surveyed Governor’s offices. Responses, from 42 states and territories, indicate that on average 89% of CRF funds have been allocated, with approximately 62% of funds already obligated.
Respondents also indicated that they intend and are on target to have all funds expended by the statutory deadline 12/30/20.
72% of respondents said that changing guidance from Treasury has slowed the allocation, obligation or expenditure of CRF dollars.
71% would like to see an extension beyond 12/30/20.
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