New COVID-19 Package Brings Relief to State and Local Governments

  • 1/13/2021
East Side of US Capitol Building

Learn how the COVID-19 relief package brings additional financial assistance and extensions to state and local governments.

Key insights

  • The deadline for state and local governments to incur costs under the CRF has been extended to December 31, 2021.
  • Multiple extensions granted for unemployment insurance benefits are available for individuals who continue to be impacted by the coronavirus.
  • Additional funding is available to state, local, and tribal governments to prevent, prepare for, and respond to the coronavirus, whether domestically or internationally.

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The much anticipated Consolidated Appropriations Act, 2021 (Act) was signed into law on Sunday, December 27, 2020. The Act includes additional COVID-19 resources (COVID-19 relief package), helping millions of governments, entities, and individuals whose benefits were set to expire in days, among other benefits and waivers.

Extension of CRF deadline

The U.S. Department of the Treasury funded state and local governments with $150 billion in aid under the Coronavirus Relief Fund (CRF) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That aid was for costs incurred between March 31, 2020, and December 30, 2020. The COVID-19 relief package extends the window to December 31, 2021, giving state and local governments an additional year to expend these funds.

Extension and additional oversight of unemployment insurance benefits

With the majority of benefits set to lapse on December 31, 2020, the Department of Labor (DOL) and Federal Emergency Management Agency (FEMA) granted additional unemployment benefits and federal disaster assistance to individuals impacted by COVID-19. We highlight key changes below.

The pandemic unemployment insurance (PUI) benefits funded by the DOL are extended through March 24, 2021. For individuals who had been receiving PUI on December 31, 2020, but had not yet exhausted all rights, assistance will continue to be payable for any week beginning on or after the date for which the individual is otherwise eligible for PUI.

State agencies are now allowed to waive repayment of PUI overpayments to individuals if the payment of such was without fault on the part of any such individual. Such repayment would be contrary to equity and good conscience.

The package also introduced a requirement to substantiate employment or self-employment and wages earned or paid to confirm eligibility for PUI. New applicants or existing applicants who claim pandemic unemployment benefits on or after January 31, 2021, will be required to provide documentation to substantiate employment or self-employment or the planned commencement of employment or self-employment. States will be required to implement procedures for identity verification or validation and for timely payment, to the extent reasonable and practicable.

The Federal Pandemic Unemployment Compensation (FPUC) benefits funded by FEMA under the CARES Act ended on July 31, 2020. The COVID-19 relief package extendes the benefits to cover weeks of unemployment beginning after December 26, 2020, (or, if later, the date on which such agreement is entered into) and ending on or before March 14, 2021. The amount of FPUC benefits for these additional weeks is $300.

The Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations reimburses governmental entities and other organizations for amounts paid (in lieu of contributions) into the state unemployment fund. Funding under this program ended on December 31, 2020, and is now extended to March 14, 2021.

Additional funding for state and local governments

As the coronavirus continues and the U.S. government races to roll out vaccines, the COVID-19 relief packages grants additional funding to provide economic assistance to governments and its citizens, not only to withstand the economic consequences of the virus, but also to stop the virus and restore the economy.

Review some of the more significant appropriations available to state and local governments as part of the package:

  • Congress designated $2 billion under FEMA’s disaster relief fund to provide financial assistance to an individual or household to meet disaster-related funeral expenses under the Stafford Disaster Relief and Emergency Assistance Act. This funding was made available at a 100% federal cost share for expenditures incurred through December 31, 2020 and will remain available until expended.
  • State and local governments will have $4.5 billion available under the Department of Health and Human Services (HHS) for activities to plan, prepare for, promote, distribute, administer, monitor, and track coronavirus vaccines to establish broad-based distribution, access, and vaccine coverage.  This funding may also be used for grants for the construction, alteration, or renovation of non-federally owned facilities to improve preparedness and response capability at the state and local level. The allocation of funds to state and local governments will follow the formula that applied to the public health emergency preparedness (PHEP) cooperative agreement in fiscal year 2020. Of this amount, $300 million is earmarked for high-risk and underserved populations, including racial and ethnic minority populations and rural communities.
  • Congress appropriated $4.25 billion under HHS for health surveillance and program support to prevent, prepare for, and respond to coronavirus. The funding is primarily comprised of $1.65 billion of substance abuse prevention and treatment block grant programs as well as an additional $1.65 billion for community mental health services block grant programs under Public Health Service Act. Eligible states that did not receive amounts made available for such purpose under the CARES Act may receive priority for this funding.
  • An additional $22.4 billion was appropriated under HHS for state, local, and tribal governments for necessary expenses for testing, contact tracing, surveillance, containment, and mitigation. The allocation of funds will follow the formula that applied to the PHEP cooperative agreement in fiscal year 2020.
  • An additional $81.8 billion of funding was appropriated for the Education Stabilization Fund, including funds for the Governor’s Emergency Education Relief Fund, Elementary and Secondary School Emergency Fund, and Higher Education Emergency Relief Fund.
  • Additional COVID-19 related funding from the Department of Transportation was also appropriated as part of the COVID Relief Package, including $2 billion for airports, $10 billion for federal highway administration, and $14 billion to transit agencies.

How we can help

CLA’s experienced professionals are here to provide guidance and assistance as you navigate the complexities brought by COVID-19. Our team is ready to help you:

  • Perform funding opportunity research and analysis
  • Navigate the grant application process
  • Develop effective strategies for implementing grant management policies and procedures
  • Ease the burden of grant compliance
  • Prepare for federal program audits
  • Provide risk management services to assist you with the steps after COVID-19

Contact us for additional information.

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