General State and Local Fiscal Assistance and COVID-19: Background and Available Data

General State and Local Fiscal Assistance and COVID-19: Background and Available Data

General State and Local Fiscal Assistance and
February 8, 2021
COVID-19: Background and Available Data
Grant A. Driessen
The sudden decline in economic output following the Coronavirus Disease 2019 (COVID-19)
Specialist in Public Finance
outbreak has significantly altered the fiscal outlook for state and local governments. A sizable

share of economic output derives from state and local government activity. These governments
are generally required to balance their operating budgets every one or two years. Available

evidence suggests that the COVID-19 economic shock will have a notable impact on state and
local budgets. This report summarizes the general fiscal assistance provided to state and local governments during the
COVID-19 crisis.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), signed into law in March 2020,
created the Coronavirus Relief Fund (CRF), which provided $150 billion in general assistance for domestic governments. Of
the $150 billion provided to the CRF through the CARES Act, (1) $139 billion was allocated to governments in the 50 states,
with allocations based on their populations and with no state receiving less than $1.25 billion; (2) $8 billion was set aside for
governments in tribal areas; and (3) $3 billion was allotted to governments in territories, including the District of Columbia
(DC) and Puerto Rico. The deadline for spending CRF funds provided through the CARES Act was initially December 30,
2020, but was extended through December 31, 2021, by the Consolidated Appropriations Act, 2021 (P.L. 116-260).
CRF assistance provided through the CARES Act was generally transferred to state governments. Local governments serving
a population of at least 500,000 had the option to receive assistance directly from Treasury. Such direct local assistance
allocations reduced the allocation that was made to the state government (keeping the state allocation constant), and equaled
the product of (1) the state or territory allocation amount, (2) the share of the state or territory population served by the local
government, and (3) 45%. As of September 30, 2020, $78 billion in CRF payments had been awarded to projects by state,
territorial, tribal, and local governments.
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Contents
Background .............................................................................................................. 1
Eligible Purposes....................................................................................................... 2
Allocations Across States, Territories, and Tribal Areas ................................................... 2
Allocations to Governments Within States and Territories ................................................ 5
Award Information..................................................................................................... 6

Tables
Table 1. Total CRF CARES Act Allocations by State and Government Type............................. 3
Table 2. Total CRF CARES Act Allocations by Territory ....................................................... 5
Table 3. Recipient Awards as a Share of Total Allocations, by State and Government Type ......... 6

Contacts
Author Information ......................................................................................................... 8

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he sudden decline in economic output following the Coronavirus Disease 2019 (COVID-
19) outbreak has significantly altered the fiscal outlook for state and local governments.
T This report briefly summarizes the background, purpose, and alocation of general fiscal
assistance provided to state and local governments during the COVID-19 crisis. Information on
more targeted, policy-specific assistance during the COVID-19 outbreak can be found in other
CRS products.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), signed into
law on March 27, 2020, created the Coronavirus Relief Fund (CRF), which provided $150 bil ion
in direct assistance for state and local governments.
Table 1 provides total CRF al ocations for the 50 states, and Table 2 provides al ocations for the
territories. A total of $149.5 bil ion was al ocated to eligible governments as of February 4, 2021.1
As of September 30, 2020, $78.4 bil ion in CRF payments had been awarded to projects by state,
territorial, tribal, and local governments.2 CRF award data by state and government type are
provided in Table 3.
Background
A sizable share of economic output derives from state and local government activity. State and
local governments spent $3.8 tril ion in 2018, 19% of gross domestic product (GDP), with 55% of
combined expenditures from state governments and 45% from local governments.3 These
governments are general y required to balance their operating budgets every one or two years. For
more on how economic shocks affect state and local government activity, see CRS Insight
IN11258, State and Local Fiscal Conditions and Economic Shocks.
Available evidence suggests that the COVID-19 economic shock wil have a notable impact on
state and local budgets. Consumption declines following nonessential business closures and social
distancing efforts are likely to produce a sharp drop in sales tax revenues (35% of state and local
tax revenues in 2018). Spikes in unemployment and decreased firm profitability are expected to
have a similar effect on individual and corporate income tax receipts (27% of tax revenues).4 Use
of state and local spending programs is likely to increase, particularly for public welfare programs
(19% of 2018 expenditures) as wel as hospital and health expenses (8% of 2018 expenditures).
The CRF, established through Section 5001 of the CARES Act, offers a means of assistance for
state and local governments. The CARES Act provided a total of $150 bil ion in federal fiscal
support for state and local governments through the CRF, with eligibility dependent upon the
location, level of government, and use of potential funds. A similar fund, the State Fiscal
Stabilization Fund, was created during the 2007-2009 recession by the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5). The State Fiscal Stabilization Fund provided $54 bil ion
to state and local governments, most of which was targeted to certain types of spending for

1 U.S. T reasury, “Daily T reasury Statement for February 4, 2021,” available at https://fsapps.fiscal.treasury.gov/dts/
files/21020400.pdf.
2 Pandemic Oversight, “Coronavirus Relief Fund,” data downloaded on February 7, 2021, available at
https://www.pandemicoversight.gov/track-the-money/funding-charts-graphs/coronavirus-relief-fund. Of the $150
billion total, $148.1 billion was provided to recipients required to report quarterly payments.
3 All state and local government finance data used in this report draw from U.S. Census Bureau, “2018 Survey of State
& Local Government Finances,” October 2020, available at https://www.census.gov/programs-surveys/gov-
finances.html.
4 T here are no indications as yet of a comparable effect on the base for property taxes (31% of 2018 tax revenues),
which are predominantly collected by local governments.
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data

education programs.5 Separately, Section 4003 of the CARES Act authorized use of Federal
Reserve capacity to support up to $454 bil ion in debt issued by state governments, local
governments, and eligible businesses.
Eligible Purposes
CRF payments received through the CARES Act al ow state and local governments to make
payments for programs that
(1) are necessary expenditures incurred due to the public health emergency with respect to
Coronavirus Disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of the date of enactment
[March 27, 2020] of this section for the State or government; and
(3) were incurred during the period that begins on March 1, 2020 and ends on December
31, 2021.6
Per Section 5001(f) of the CARES Act, the Inspector General of the Department of the Treasury
determines whether CRF payments are used for eligible purposes. Fund payments that are
deemed for ineligible purposes are treated as a debt owed by the implementing government to
Treasury.
As clarified in Treasury guidance, CRF payments may not be used to directly account for revenue
shortfal s related to the COVID-19 outbreak.7 Such funds, however, may indirectly assist with
revenue shortfal s in cases where expenses paid for by the CRF would otherwise widen the gap
between government outlays and receipts. For example, if $3 bil ion in CRF assistance is sent to a
government with revenues that are $10 bil ion lower than expected and $5 bil ion in new COVID-
19-related expenses, that assistance wil reduce the fiscal gap (from $15 bil ion to $12 bil ion) by
the same amount regardless of whether it applies to revenues or spending. Only in cases where
governments have revenue shortfal s and less related spending than the program provides are
governments limited by the eligible purpose restrictions. For instance, in that same example but
with no new COVID-19-related expenses, the government could not use CRF assistance despite
its decrease in revenues.
Allocations Across States, Territories, and Tribal Areas
The CARES Act stipulates that the $150 bil ion provided to the CRF is al ocated to governments
in states, territories, and tribal areas as follows:8
 $139 bil ion is al ocated for governments in the 50 states based on their
populations (as measured by the U.S. Census Bureau in 2019), with no state
receiving less than $1.25 bil ion.

5 For more information about this program, see U.S. Department of Education, “State Fiscal Stabilization Fund,” March
7, 2009, available at https://www2.ed.gov/policy/gen/leg/recovery/factsheet/stabilization-fund.html.
6 T he Coronavirus Relief Fund was also used by the Consolidated Appropriations Act, 2021 to allocate $25 billion in
payments to state and local governments for emergency rental assistance. T hose more targeted allocations are not
explored further in this report.
7 U.S. T reasury, “Coronavirus Relief Fund Guidance as published in the Federal Register on January 15, 2021,”
January 15, 2021, available at https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
8 T his allocation methodology differs from what was implemented by the American Recovery and Reinvestment Act of
2009 for the State Fiscal Stabilization Fund, which treated the 50 states, the District of Columbia, and Puerto Rico
uniformly when implementing allocation procedures.
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 $8 bil ion is set aside for governments in tribal areas, with each tribal area’s
al ocation based on its share of aggregate tribal expenditures in FY2019, as
determined by the Secretary of the Treasury in consultation with the Secretary of
the Interior.
 $3 bil ion is al ocated to the territories of the District of Columbia (DC), Puerto
Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, and American
Samoa, with each territory receiving an amount based on its share of the total
population across al territories, with populations determined by the Secretary of
the Treasury.
Table 1 shows state al ocations for CRF payments made through the CARES Act. Due to the
$1.25 bil ion minimum al ocation for states, every state with an al ocation greater than the
minimum amount receives a smal er al ocation share (excluding amounts provided to tribal areas)
than its share of the population. Most states with a minimum al ocation amount, in contrast, have
a larger al ocation share than their population share. Treasury has al ocated al amounts
designated for nontribal governments.9
Table 1. Total CRF CARES Act Allocations by State and Government Type
(combined amounts to al direct recipients, in bil ions of dol ars)
State
State Allocation
Local Allocation
Tribal Allocation
Total Allocation
Alabama
1.786
0.115
0.057
1.958
Alaska
1.250
-
0.845
2.095
Arizona
1.857
0.965
1.266
4.088
Arkansas
1.250
-
-
1.250
California
9.526
5.795
0.776
16.097
Colorado
1.674
0.560
0.028
2.262
Connecticut
1.382
-
0.121
1.503
Delaware
0.927
0.323
-
1.250
Florida
5.856
2.473
0.158
8.487
Georgia
3.503
0.614
-
4.117
Hawai
0.863
0.387
-
1.250
Idaho
1.250
-
0.056
1.306
Il inois
3.519
1.395
-
4.914
Indiana
2.442
0.168
-
2.610
Iowa
1.250
-
0.011
1.261
Kansas
1.034
0.216
0.018
1.268
Kentucky
1.599
0.133
-
1.732
Louisiana
1.803
-
0.040
1.843
Maine
1.250
-
0.025
1.275
Maryland
1.653
0.691
-
2.344

9 U.S. T reasury, “Payments to States and Eligible Units of Local Government,” May 11, 2020, available at
https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data

State
State Allocation
Local Allocation
Tribal Allocation
Total Allocation
Massachusetts
2.461
0.212
0.009
2.682
Michigan
3.081
0.792
0.242
4.115
Minnesota
1.870
0.317
0.267
2.454
Mississippi
1.250
-
0.062
1.312
Missouri
2.084
0.296
-
2.380
Montana
1.250
-
0.219
1.469
Nebraska
1.084
0.166
0.066
1.316
Nevada
0.836
0.414
0.122
1.372
New Hampshire
1.250
-
-
1.250
New Jersey
2.394
1.050
-
3.444
New Mexico
1.068
0.182
0.253
1.503
New York
5.136
2.408
0.114
7.658
North Carolina
3.585
0.482
0.063
4.130
North Dakota
1.250
-
0.146
1.396
Ohio
3.754
0.779
-
4.533
Oklahoma
1.259
0.275
1.647
3.181
Oregon
1.389
0.247
0.201
1.837
Pennsylvania
3.935
1.029
-
4.964
Rhode Island
1.250
-
0.006
1.256
South Carolina
1.905
0.091
0.022
2.018
South Dakota
1.250
-
0.201
1.451
Tennessee
2.363
0.285
-
2.648
Texas
8.038
3.205
0.054
11.297
Utah
0.935
0.315
0.030
1.280
Vermont
1.250
-
-
1.250
Virginia
3.110
0.200
0.019
3.329
Washington
2.167
0.786
0.565
3.518
West Virginia
1.250
-
-
1.250
Wisconsin
1.997
0.260
0.251
2.508
Wyoming
1.250
-
0.039
1.289
Total
111.375
27.625
8.00
147.000
Source: Pandemic Oversight, “Coronavirus Relief Fund,” data downloaded on February 8, 2021, available at
https://www.pandemicoversight.gov/track-the-money/funding-charts-graphs/coronavirus-relief-fund.
Note: Alaska tribal al ocation total includes $0.5 bil ion intended for Alaska Native Corporations that are
currently withheld by the federal government due to ongoing litigation. Amounts may not sum to totals due to
rounding.
The CARES Act provided a total of $8 bil ion to be distributed to tribal governments through the
CRF. The CARES Act further stipulated that fund al ocations to individual tribal governments
were to be based on increases in government expenditures from FY2019 to FY2020, through a
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process established by the Department of the Treasury and Department of the Interior.10 That
process resulted in two rounds of payments.11 The first round of payments distributed 60% of the
tribal total, with al ocations based on tribal population data. The second-round payments were
distributed based on tribal employment and expenditure data after such data were provided.
Treasury has provided al fund al ocations to tribal governments except those designated for
governments of Alaska Native Corporations, whose participation is the subject of ongoing
litigation.12
Table 2 provides estimated CRF al ocations made through the CARES Act to areas designated for
fund purposes as territories, including the District of Columbia. Territory al ocations are made in
direct proportion to the relevant population estimate, with no minimum amount provided.
Al ocation shares for al territories except Puerto Rico are smal er than the state minimum
amount. Treasury has al ocated al amounts designated for territorial governments.13
Table 2. Total CRF CARES Act Allocations by Territory
Allocation
Territory
($ Billions)
American Samoa
0.035
District of Columbia
0.495
Guam
0.118
Northern Mariana Islands
0.036
Puerto Rico
2.241
U.S. Virgin Islands
0.075
Total
3.000
Source: Pandemic Oversight, “Coronavirus Relief Fund,” data downloaded on February 8, 2021, available at
https://www.pandemicoversight.gov/track-the-money/funding-charts-graphs/coronavirus-relief-fund.
Note: Territorial al ocations were provided exclusively to territorial governments.
Allocations to Governments Within States and Territories
CRF assistance is general y provided to state governments. Local governments serving a
population of at least 500,000 (as measured in the most recent census data), however, may elect to
receive assistance directly from Treasury. Such direct local assistance al ocations reduce the
al ocation made to the state government (keeping the state al ocation constant) and are equal to
the product of
 the state or territory al ocation amount;

10 Section 5001(c)(7) of the CARES Act.
11 U.S. T reasury, “Coronavirus Relief Fund T ribal Allocation Methodology,” August 11, 2020, available at
https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
12 U.S. T reasury, “T ribal Allocation Methodology for Second Distribution,” June 17, 2020, available at
https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
13 U.S. T reasury, “Interim Report of Costs Incurred by the District of Columbia and T erritories through June 30, 2020,”
August 24, 2020, available at https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
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 the percentage of the state or territory population attributed to the local
government; and
 45%.14
The CARES Act does not explicitly prevent local governments (regardless of their eligibility for
direct assistance) from receiving CRF payments from state governments, so long as the funds are
used for eligible purposes. State governments transferred $543 bil ion to local governments in
2018, or 27% of al local government revenues.
In many cases, populations are served by more than one local government that is eligible for
direct assistance from the CRF (e.g., a city with a population of 700,000 located in a county with
200,000 other people, and thus with a county population of 900,000). Guidance from the
Secretary of the Treasury clarified that in such cases, al overlapping governments are eligible for
assistance. However, direct assistance payments to larger localities wil be calculated using only
their unique population, or wil be reduced by any amounts also attributable to smal er localities
receiving assistance (i.e., in the above example the county government only uses a population of
200,000 for its direct payment calculation).
Award Information
Table 3 shows the percentage of the total al ocation that has been awarded to projects for each
state and type of government as of September 30, 2020. Just over half of al CRF Funds ($78.4
bil ion, or 52%) have been awarded to projects. State and territorial governments ($62.9 bil ion,
or 55%) have awarded a slightly higher percentage of their al ocations to projects than local
governments ($12.6 bil ion, 46%) and tribal governments ($2.9 bil ion, 36%), with the delayed
and withheld transmission of funding one possible explanation for the lower tribal government
total.15
Table 3. Recipient Awards as a Share of Total Allocations, by State and Government
Type
(Award Data as of September 30, 2020)
State or
State
Territory
Local
Tribal
Total
Alabama
41%
18%
<1%
39%
Alaska
80%
-
7%
51%
American Samoa
51%
-
-
51%
Arizona
48%
80%
31%
50%
Arkansas
62%
-
-
62%
California
91%
55%
58%
77%
Colorado
74%
43%
43%
66%
Connecticut
36%
-
44%
37%
Delaware
18%
11%
-
17%
District of Columbia
56%
-
-
56%

14 Section 5001(c)(5) of the CARES Act.
15 U.S. T reasury, “T ribal Allocation Methodology for Second Distribution,” June 17, 2020, available at
https://home.treasury.gov/policy-issues/cares/state-and-local-governments.
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data

State or
State
Territory
Local
Tribal
Total
Florida
86%
49%
44%
75%
Georgia
29%
42%
-
31%
Guam
>99%
-
-
>99%
Hawai
10%
17%
-
12%
Idaho
27%
-
29%
27%
Il inois
23%
55%
-
32%
Indiana
57%
48%
-
56%
Iowa
60%
-
55%
60%
Kansas
51%
25%
56%
47%
Kentucky
32%
13%
-
30%
Louisiana
77%
-
55%
76%
Maine
43%
-
20%
42%
Maryland
>99%
30%
-
88%
Massachusetts
54%
12%
78%
51%
Michigan
74%
33%
84%
66%
Minnesota
67%
56%
46%
63%
Mississippi
57%
-
48%
56%
Missouri
43%
29%
-
42%
Montana
36%
-
32%
36%
Nebraska
57%
33%
11%
52%
Nevada
65%
55%
12%
57%
New Hampshire
63%
-
-
63%
New Jersey
2%
33%
-
11%
New Mexico
76%
61%
39%
68%
New York
56%
57%
39%
56%
North Carolina
76%
34%
70%
71%
North Dakota
46%
-
18%
43%
Northern Mariana Islands
<1%
-
-
<1%
Ohio
43%
59%
-
46%
Oklahoma
56%
33%
32%
41%
Oregon
46%
49%
42%
46%
Pennsylvania
58%
32%
-
52%
Puerto Rico
43%
-
-
43%
Rhode Island
29%
-
33%
29%
South Carolina
31%
1%
5%
30%
South Dakota
22%
-
22%
22%
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data

State or
State
Territory
Local
Tribal
Total
Tennessee
73%
43%
-
70%
Texas
45%
41%
15%
44%
U.S. Virgin Islands
48%
-
-
48%
Utah
54%
26%
63%
47%
Vermont
51%
-
-
51%
Virginia
28%
39%
11%
29%
Washington
69%
27%
40%
55%
West Virginia
52%
-
-
52%
Wisconsin
42%
30%
63%
43%
Wyoming
41%
-
69%
42%
Total
55%
46%
36%
52%
Source: Pandemic Oversight, “Coronavirus Relief Fund,” available at https://www.pandemicoversight.gov/track-
the-money/funding-charts-graphs/coronavirus-relief-fund. CRS calculations.
Notes: Calculations do not account for $1.9 bil ion in payments to governments without quarterly reporting
requirements, which are not identifiable by state and government level. Alaska tribal al ocation total includes $0.5
bil ion intended for Alaska Native Corporations that are currently withheld by the federal government due to
ongoing litigation. Recipients may choose to transfer funds to governments within their jurisdiction, but are not
obligated to do so. The data includes activity from such transfers.
There are several reasons why governments facing budgetary pressures may not have
immediately incurred costs equal to their fund al ocations. There is typical y a lag between when
new, unexpected funds are distributed to state and local governments (which in this case general y
occurred in April 2020) and when that money can be spent, as state and local governments need
time to plan and approve use of the new budget authority. A subsequent lag can occur between the
issuance of such authority and when costs are incurred. Governments may also be responding to
evolving federal guidance on eligible fund programs, with the latest Treasury update provided in
August 2020.16 Following enactment of the CARES Act, there have been multiple proposals to
expand the eligible uses of CRF payments, including two pieces of legislation that passed the
House in 2020 (H.R. 6800 and H.R. 925, both of which were titled “The Heroes Act”), which
may have also influenced state and local budgetary planning.

Author Information

Grant A. Driessen

Specialist in Public Finance

16 U.S. T reasury, “Coronavirus Relief Fund Frequently Asked Questions,” August 10, 2020.
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data

Acknowledgments
The author wishes to thank Jameson Carter, Gene Falk, and Maggie McCarty for their helpful contributions
to this report.

Disclaimer
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Congressional Research Service
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