Direct Assistance to States, Localities Left Out of Second Federal COVID-19 Relief Package

The roughly $900 billion Congress agreed to spend on supporting employers and U.S. residents through the next few months of the coronavirus pandemic does not include payments to state, county and city governments. However, indirect aid to localities is coming through programs that support reopening public schools, boost infrastructure and fund vaccination efforts.

A detailed summary of the compromise bill prepared by CNBC lists these provisions that most impact state and local workers

  • One-time $600 payments to most adult Americans and $600 for each child. Amounts paid to individuals will be adjusted based on the recipient’s household income for 2019, with individuals who earned up to $75,000 and couples who earned up to $150,000 receiving the full allotment.
  • $300 federal supplements to weekly unemployment insurance (UI) payments through mid-March 2021.
  • Continuing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation through mid-March to ensure individuals who exhaust their standard UI eligibility will go on receiving payments.
  • $20 billion to purchase COVID-19 vaccines, and another $8 billion to support vaccine distribution.
  • $14 billion for transit systems,
  • $8 billion for state highways.
  • $82 billion for public K-12 schools to purchase personal protective equipment, upgrade facilities and take other steps to ensure the health and safety of staff and students.
  • $10 billion for child care assistance.

Mayors, county executives and governors decried the lack of aid to governments. A Moody’s Analytics report issued Dec. 17, 2020, and cited by NBC News notes that “state and local governments will face a total shortfall ranging between $330 billion and $470 billion through fiscal year 2022.” Plugging budget holes will require austerity (e.g., reductions in force, hiring freezes, service cutbacks) or tax hikes.

You can read the full text of the relief bill here.

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