Congress is moving quickly to consider and act on a comprehensive COVID-19 relief package that, as currently written, will provide all cities with direct and flexible aid to respond to the ongoing COVID-19 pandemic. In early February, the U.S. House Committee on Oversight and Reform released its Fiscal Year 2021 Reconciliation Act bill, which includes $350 billion in Coronavirus State and Local Fiscal Recovery Funds. All city officials are urged to call your House member today to advocate for passage of this important support. These funds are essential to Washington cities to ensure that our communities can recover from the COVID-19 pandemic.

If the bill passes as proposed, cities across the country would have access to about $65 billion in federal funds. Unlike the CARES Act passed in March 2020, the State and Local Coronavirus Relief Funds are available for cities to use indefinitely. While the funds will be flexible, they must be used to respond to the COVID-19 pandemic, ensure the continuation of essential services, or address the negative economic impacts, including replacing lost city revenue, resulting from the ongoing pandemic.

The Treasury Department will use a modified Community Development Block Grant (CDBG) formula to distribute the recovery funds. Metropolitan cities, also known as entitlement communities, will apply for and receive funds directly from the Treasury. The Treasury is required to make payments to such cities within 60 days of receiving a city’s application. In our state, there are 24 cities classified as entitlement communities.

Non-entitlement communities will apply for and receive federal relief allocation through the state. Payments to non-entitlement cities will be based on proportionate population but will be capped at 75% of the most recent adopted budget as of January 27, 2020. States will be required to transmit funds to those cities within 30 days of receiving a city’s application. However, states will not be able to begin transmitting the funds until they receive their allocation from the Treasury.

AWC recognizes that some cities meet the definition of a “metropolitan city” but are classified as a “non-entitlement community” under the CDBG program. The current understanding of the language is that any city classified as a “non-entitlement community” will apply for and receive their federal relief funds through the state.

AWC has compiled a chart that contains projected allocations for cities from the Treasury, if the proposal is signed into law. These estimates are not official values from the U.S. Treasury and are subject to change.

Please note, the funds will only be available if they are included in the final bill that is signed into law. It is therefore critical that you contact your members of Congress to urge their support. We thank all city officials who have been active with AWC and the National League of Cities (NLC) over the past year to urge federal action to support cities of all sizes as we work toward recovery.