On July 27, Senate Republicans introduced an initial proposal for the next round of federal coronavirus relief. Referred to as the HEALS Act, the proposal does not include additional funds for state and local governments. However, it does include additional flexibility for using existing CARES Act funds. In response to the proposed legislation, AWC issued a statement urging federal lawmakers to include additional fiscal support for local governments in the act.
The additional flexibility provided by the HEALS Act includes a 90-day extension beyond the December 31, 2020 deadline established under the CARES Act. Cities will also be allowed to use Coronavirus Relief Funds (CRF) to cover revenue shortfalls incurred during fiscal years 2020 and 2021; however, this use would be subject to a limit of 25% of relief funds issued to the city. Cities would also be prohibited from using CRF funds to replenish rainy day funds or pension benefits.
U.S. House Democrats had previously passed their version of the next relief act dubbed the HEROES Act. Passed in May, the act provides more than $1 trillion to state and local governments, including $915 billion in flexible aid distributed in installments over the next year. $375 billion of the $915 million is set aside specifically for local governments. The HEROES Act also includes a provision that would allow for greater flexibility in how remaining CARES Act dollars could be spent by state and local governments.
We encourage AWC members to contact your federal representatives today and share your city’s story of why direct federal relief is critical for your community.