Murtha Cullina LLP

April 15, 2020 - Municipal Law Group News: CARES Act Assistance for Municipalities

By: Kari L. Olson and Bridget M. D'Angelo

The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) became law on March 27, 2020.  The CARES Act authorizes the provision of debt guarantees, direct loans as well as the direct purchase by the Federal Reserve of state and local government obligations.

Cities and towns are facing higher direct costs responding to the COVID-19 pandemic, increased indirect costs due to changes in the economy and lower revenues as a result of the economic disruption.  While the full implications of the pandemic remain unknown, the sudden decline in economic output has significantly altered the financial outlook for state and local governments.

The CARES Act provides the Treasury Secretary with authority to make loans, guarantees and investments in an amount not to exceed $500 billion.  $25 billion is allocated to air carriers, $4 billion to cargo air carriers, and $17 billion to businesses critical to maintaining national security.  The remaining $454 billion is for eligible businesses, states and municipalities.

Section 4003(b)(4) of the CARES Act Loan Program
What is it?
The CARES Act sets aside $454 billion for financial programs to assist eligible businesses, states, and municipalities (“4003(b)(4) programs”).  Very few particulars regarding the 4003(b)(4) programs have been provided other than that the Secretary of the Treasury shall provide the opportunity for the Federal Reserve to implement a program for direct loans to states and municipalities on favorable terms, provided that such loans will not be subject to forgiveness.

Who gets it?
States and municipalities (as well as certain private businesses) will qualify for these direct loans.  Under the CARES Act, a municipality includes (i) any political subdivision of a state; and (ii) any instrumentality of a municipality, a state, or a political subdivision of a state. Guidance on how to apply for a loan is forthcoming from the Secretary of the Treasury.

Coronavirus Relief Fund

What is it?

The most relevant piece of the CARES Act for states and municipalities is the $150 billion Coronavirus Relief Fund, which was established though Section 5001 of the CARES Act.  This money is to be distributed to states, tribal governments, and local governments with populations exceeding 500,000 to cover necessary expenditures related to COVID-19 that were not accounted for in that government’s budget and are incurred between March 1 and December 30, 2020 (the “Allowed Purposes”).

Distribution amounts are calculated in the following manner:

  • $3 billion is reserved for payments to the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, and $8 billion is reserved for payments to tribal governments.
  • There is a minimum payment of $1.25 billion to each state and payments to the states from the remaining $139 billion will be in amounts equal to the population of that state in relation to the total population of all states (excluding the locations covered above).
  • Eligible local governments will receive an amount equal to the product of (a) 45% of the payment determined for its state and (b) the amount equal to the quotient of (i) the population of the local government and (ii) the total population of its state.  In order to receive a direct payment, the unit of local government must provide the Treasury Secretary with a certification signed by the Chief Executive of the local unit stating that the “local government’s proposed uses of the funds are consistent” with the Allowed Purposes.
  • If a local government receives a direct payment, then the Treasury Secretary will reduce the amount determined for its state by the amount to be paid to that local government.

The Department of the Treasury’s Inspector General has oversight and monitoring responsibility over these funds.  If the Inspector General determines that the funds have not been used for the Allowed Purposes, that amount will be “booked as a debt of such entity owed to the Federal Government” pursuant to Section 5001 of the CARES Act.

 

Who gets it?

The Secretary of the Treasury will pay to each state, local, and tribal government their allocation directly on or before April 26, 2020.  This table uses the latest available population data, circa July 2019, but the Treasury Department may utilize different figures.

 

Estimated Shares of CARES Act Funding

State

Jurisdiction

Amount

Alabama

Total Allocation

$1,901,376,504

 

State Share

$1,786,453,683

 

Jefferson County

$   114,922,821

Alaska

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Arizona

Total Allocation

$2,822,569,714

 

State Share

$1,857,099,389

 

Maricopa County

$   782,717,225

 

Pima County

$   182,753,100

Arkansas

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

California

Total Allocation

$15,322,206,367

 

State Share

$9,526,137,621

 

Alameda County

$   291,651,561

 

Contra Costa County

$   201,293,497

 

Fresno County

$   174,345,905

 

Kern County

$   157,087,754

 

Los Angeles County

$1,751,852,108

 

Orange County

$   554,167,091

 

Riverside County

$   431,117,152

 

Sacramento County

$   270,838,440

 

San Bernardino County

$   380,430,899

 

San Diego County

$   582,547,875

 

San Francisco County

$   153,832,754

 

San Joaquin County

$   132,996,947

 

San Mateo County

$   133,769,122

 

Santa Clara County

$   336,415,539

 

Stanislaus County

$     96,091,702

 

Ventura County

$   147,630,401

Colorado

Total Allocation

$2,233,145,460

 

State Share

$1,673,950,246

 

Adams County

$     90,291,404

 

Arapahoe County

$   114,576,782

 

Denver County

$   126,900,343

 

El Paso County

$   125,712,328

 

Jefferson County

$   101,714,356

Connecticut

Total Allocation

$1,382,561,117

 

State Share

$   913,181,962

 

Fairfield County

$   164,614,059

 

Hartford County

$   155,607,621

 

New Haven County

$   149,157,475

Delaware

Total Allocation

$1,250,000,000

 

State Share

$   927,233,331

 

New Castle County

$   322,766,669

Florida

Total Allocation

$8,328,721,940

 

State Share

$5,856,159,554

 

Brevard County

$   105,040,554

 

Broward County

$   340,765,195

 

Duval County

$   167,130,913

 

Hillsborough County

$   256,862,512

 

Lee County

$   134,467,831

 

Miami-Dade County

$   474,113,590

 

Orange County

$   243,161,252

 

Palm Beach County

$   261,190,530

 

Pasco County

$     96,665,293

 

Pinellas County

$   170,139,515

 

Polk County

$   126,475,603

 

Volusia County

$     96,549,598

Georgia

Total Allocation

$4,117,266,353

 

State Share

$3,503,081,996

 

Cobb County

$   132,646,720

 

DeKalb County

$   132,499,439

 

Fulton County

$   185,659,967

 

Gwinnett County

$   163,378,230

Hawaii

Total Allocation

$1,250,000,000

 

State Share

$   862,823,979

 

Honolulu County

$   387,176,021

Idaho

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Illinois

Total Allocation

$4,913,928,948

 

State Share

$3,519,156,999

 

Cook County

$   898,729,990

 

DuPage County

$   161,052,283

 

Kane County

$     92,905,805

 

Lake County

$   121,547,296

 

Will County

$   120,536,576

Indiana

Total Allocation

$2,610,646,554

 

State Share

$2,442,324,311

 

Marion County

$   168,322,243

Iowa

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Kansas

Total Allocation

$1,250,000,000

 

State Share

$1,034,052,049

 

Johnson County

$   116,311,034

 

Sedgwick County

$     99,636,917

Kentucky

Total Allocation

$1,732,491,935

 

State Share

$1,598,690,705

 

Jefferson County

$   133,801,230

Louisiana

Total Allocation

$1,802,727,754

 

State Share

$1,802,727,754

Maine

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Maryland

Total Allocation

$2,344,417,741

 

State Share

$1,653,367,701

 

Anne Arundel County

$   101,077,945

 

Baltimore city

$   103,565,657

 

Baltimore County

$   144,378,367

 

Montgomery County

$   183,347,980

 

Prince George’s County

$   158,680,092

Massachusetts

Total Allocation

$2,672,802,119

 

State Share

$1,655,720,328

 

Bristol County

$     98,631,939

 

Essex County

$   137,688,629

 

Middlesex County

$   281,245,960

 

Norfolk County

$   123,334,204

 

Plymouth County

$     90,951,199

 

Suffolk County

$   140,284,009

 

Worcester County

$   144,945,850

Michigan

Total Allocation

$3,872,742,971

 

State Share

$3,080,874,821

 

Kent County

$   114,640,476

 

Macomb County

$   152,510,546

 

Oakland County

$   219,451,908

 

Wayne County

$   305,265,221

Minnesota

Total Allocation

$2,186,958,839

 

State Share

$1,870,033,167

 

Hennepin County

$   220,893,126

 

Ramsey County

$     96,032,546

Mississippi

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Missouri

Total Allocation

$2,379,996,144

 

State Share

$2,083,827,229

 

Jackson County

$   122,677,376

 

St. Louis County

$   173,491,539

Montana

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Nebraska

Total Allocation

$1,250,000,000

 

State Share

$1,083,865,742

 

Douglas County

$   166,134,258

Nevada

Total Allocation

$1,250,000,000

 

State Share

$   836,051,100

 

Clark County

$   413,948,900

New Hampshire

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

New Jersey

Total Allocation

$3,444,370,826

 

State Share

$2,393,995,126

 

Bergen County

$   162,671,843

 

Camden County

$     88,380,599

 

Essex County

$   139,423,361

 

Hudson County

$   117,334,101

 

Middlesex County

$   143,975,615

 

Monmouth County

$   107,981,449

 

Ocean County

$   105,955,647

 

Passaic County

$     87,570,033

 

Union County

$     97,083,053

New Mexico

Total Allocation

$1,250,000,000

 

State Share

$1,067,817,494

 

Bernalillo County

$   182,182,506

New York

Total Allocation

$7,543,778,952

 

State Share

$5,219,021,994

 

Bronx County

$   247,481,068

 

Erie County

$   160,316,055

 

Kings County

$   446,710,197

 

Monroe County

$   129,440,929

 

Nassau County

$   236,787,014

 

New York County

$   284,213,729

 

Queens County

$   393,304,493

 

Suffolk County

$   257,670,983

 

Westchester County

$   168,832,489

North Carolina

Total Allocation

$4,067,110,763

 

State Share

$3,585,606,805

 

Guilford County

$     93,738,358

 

Mecklenburg County

$   193,760,212

 

Wake County

$   194,005,388

North Dakota

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Ohio

Total Allocation

$4,532,845,506

 

State Share

$3,757,703,970

 

Cuyahoga County

$   215,523,501

 

Franklin County

$   229,777,586

 

Hamilton County

$   142,651,313

 

Montgomery County

$     92,780,861

 

Summit County

$     94,408,274

Oklahoma

Total Allocation

$1,534,449,890

 

State Share

$1,281,597,801

 

Oklahoma County

$   139,154,452

 

Tulsa County

$   113,697,637

Oregon

Total Allocation

$1,635,570,763

 

State Share

$1,388,745,825

 

Multnomah County

$   141,845,459

 

Washington County

$   104,979,478

Pennsylvania

Total Allocation

$4,964,406,011

 

State Share

$3,935,406,029

 

Allegheny County

$   212,203,236

 

Bucks County

$   109,634,863

 

Chester County

$     91,612,041

 

Delaware County

$     98,898,929

 

Lancaster County

$     95,230,357

 

Montgomery County

$   144,996,980

 

Philadelphia County

$   276,423,576

Rhode Island

Total Allocation

$1,250,000,000

 

State Share

$   910,740,118

 

Providence County

$   339,259,882

South Carolina

Total Allocation

$1,996,588,712

 

State Share

$1,905,229,176

 

Greenville County

$     91,359,536

South Dakota

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Tennessee

Total Allocation

$2,648,244,148

 

State Share

$2,363,576,014

 

Davidson County

$   121,130,060

 

Shelby County

$   163,538,075

Texas

Total Allocation

$11,244,137,605

 

State Share

$8,038,804,878

 

Bexar County

$   349,625,748

 

Collin County

$   180,563,264

 

Dallas County

$   459,904,876

 

Denton County

$   154,820,090

 

El Paso County

$   146,449,366

 

Fort Bend County

$   141,641,815

 

Harris County

$   822,488,328

 

Hidalgo County

$   151,591,789

 

Montgomery County

$   105,991,420

 

Tarrant County

$   366,894,718

 

Travis County

$   222,308,518

 

Williamson County

$   103,052,793

Utah

Total Allocation

$1,250,000,000

 

State Share

$   936,475,736

 

Salt Lake County

$   202,499,486

 

Utah County

$   111,024,778

Vermont

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Virginia

Total Allocation

$3,309,937,372

 

State Share

$3,109,689,845

 

Fairfax County

$   200,247,527

Washington

Total Allocation

$2,952,933,375

 

State Share

$2,167,209,642

 

King County

$   393,116,728

 

Pierce County

$   157,921,528

 

Snohomish County

$   143,455,771

 

Spokane County

$     91,229,706

West Virginia

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

Wisconsin

Total Allocation

$2,257,846,523

 

State Share

$1,997,414,905

 

Dane County

$     95,399,799

 

Milwaukee County

$   165,031,819

Wyoming

Total Allocation

$1,250,000,000

 

State Share

$1,250,000,000

 

Please contact your Murtha Cullina municipal attorney with further questions.  Note that this is part of a series of COVID-19 alerts providing clients with practical advice on navigating these difficult times.

 

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