Brown, Colleagues Announce Plan to Deliver Direct Federal Relief Funding to Local Governments Responding to and Recovering From Coronavirus Pandemic

Senator Calling for Robust, Dedicated and Flexible Funding That Can Be Used as Lost Revenue Replacement for Local Governments on Frontlines of Coronavirus Pandemic; Dedicated Federal Funding for Local Communities Would Provide Necessary Relief On Lost Revenues, Increased Costs And Help Avoid Local Tax & Fee Increases

WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH), along with Sens. Kirsten Gillibrand (D-NY), Doug Jones (D-AL), Joe Manchin (D-WV), Michael Bennet (D-CO) and Gary Peters (D-MI) announced a plan to provide local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the COVID-19 emergency. This local assistance would be a complement to critical relief that states also require in this crisis.

“Ohio communities have stepped up to meet this challenge and they’re doing it all while watching their tax dollars dry up,” said Brown. “This direct relief is a lifeline for many of our local governments who are facing the impossible decision of choosing between tax hikes and laying off public safety officials like police officers, sheriffs’ deputies and firefighters. We can’t let Ohio communities deal with the rippling effects of this crisis alone. We have to do more.”

Under the proposed bill, the local relief fund would be split 50/50, half committed to cities, towns and villages, and half committed to counties:

  • Of the portion allocated for cities, towns, and villages, 70% would go to Community Development Block Grant (CDBG) entitlement communities using the CDBG formula through the Department of Housing and Urban Development (HUD) to allocate the funding.  
  • The remaining 30% for cities, towns, and villages would be send to states, which would be required to sub-allocate the entire amount within 30 days to all non-entitlement communities in the state based on population.
  •  The portion of emergency fiscal assistance for counties would be allocated across all counties based on population. The exception to that formula is that a current CDBG entitlement county would receive its entitlement amount if it is higher than what that county would receive under an allocation based on population.

Local governments would be able to use this federal relief to help address costs associated with lost revenues and response to the pandemic, in an effort to help avoid cuts to essential services and local tax and fee increases. This proposed formula for local fiscal relief is intended to be incorporated into a larger legislative package that will also include fiscal relief for state and tribal governments; retroactive availability to use the Coronavirus Relief Fund in the CARES Act for lost revenues; and other important matters.

Additional Background

Brown has been fighting for local governments in Ohio and calling for robust, dedicated and flexible investments in towns, cities and counties strained economically by coronavirus as they provide critical services to keep residents healthy and safe.

According to a study published by the Brookings Institution, four out of the top five cities set to be hurt most financially by the coronavirus pandemic are in Ohio: Columbus, Cincinnati, Toledo and Cleveland.

Brown wrote to Senate Leaders last month, calling for robust, dedicated and flexible funding for state and local governments in any future stimulus package – including funds that can be used as lost revenue replacement.  He also pushed for flexibility on how existing CARES Act funding may be spent. Following Brown’s letter, President Trump announced that a future stimulus package will allow state and local governments to replace lost revenue with funding from the CARES Act.

Brown also joined Congresswoman Marcy Kaptur (D-OH),  Representatives David Joyce (R-OH) and Anthony Gonzalez (R-OH) in a letter to Secretary Mnuchin, urging the certification of the Northeast Ohio Areawide Coordinating Agency’s (NOACA) request for direct federal funding from the Department of the Treasury through the Coronavirus Relief Fund. The counties of Northeast Ohio, with the exception of Cuyahoga County, lack direct access to relief mechanisms enacted by the CARES Act. These counties include Geauga County, Lake County, Lorain County, and Medina County.

Brown and Kaptur also sent a letter to Mnuchin, urging the certification of the Toledo Metropolitan Area Council of Governments’ (TMACOG) request for direct federal funding from the Department of the Treasury through the Coronavirus Relief Fund. Toledo is without direct access to relief funding enacted by the CARES Act, because it falls short of the 500,000 benchmark by just 70,000 residents under the existing formula. TMACOG represents more than 800,000, including residents of Lucas, Ottawa, Sandusky, Wood, and Fulton counties in Ohio. The letter is available here.

 

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