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General State and Local Fiscal Assistance and
COVID-19: Background and Available Data
Updated February 8, 2021
Congressional Research Service
https://crsreports.congress.gov
R46298
SUMMARY
R46298
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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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data
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
Congressional Research Service
The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data
he sudden decline in economic output following the Coronavirus Disease 2019 (COVID-
T 19) outbreak has significantly altered the fiscal outlook for state and local governments.
This report briefly summarizes the background, purpose, and allocation 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 billion
in direct assistance for state and local governments.
Table 1 provides total CRF allocations for the 50 states, and Table 2 provides allocations for the
territories. A total of $149.5 billion was allocated to eligible governments as of February 4, 2021.1
As of September 30, 2020, $78.4 billion 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 trillion 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 generally 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 will 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 well 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 billion 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 billion
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 billion in debt issued by state governments, local
governments, and eligible businesses.
Eligible Purposes
CRF payments received through the CARES Act allow 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
shortfalls related to the COVID-19 outbreak. 7 Such funds, however, may indirectly assist with
revenue shortfalls in cases where expenses paid for by the CRF would otherwise widen the gap
between government outlays and receipts. For example, if $3 billion in CRF assistance is sent to a
government with revenues that are $10 billion lower than expected and $5 billion in new COVID-
19-related expenses, that assistance will reduce the fiscal gap (from $15 billion to $12 billion) by
the same amount regardless of whether it applies to revenues or spending. Only in cases where
governments have revenue shortfalls 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 billion provided to the CRF is allocated to governments
in states, territories, and tribal areas as follows:8
$139 billion is allocated 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 billion.
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 billion is set aside for governments in tribal areas, with each tribal area’s
allocation 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 billion is allocated 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 all territories, with populations determined by the Secretary of
the Treasury.
Table 1 shows state allocations for CRF payments made through the CARES Act. Due to the
$1.25 billion minimum allocation for states, every state with an allocation greater than the
minimum amount receives a smaller allocation share (excluding amounts provided to tribal areas)
than its share of the population. Most states with a minimum allocation amount, in contrast, have
a larger allocation share than their population share. Treasury has allocated all amounts
designated for nontribal governments. 9
Table 1. Total CRF CARES Act Allocations by State and Government Type
(combined amounts to all direct recipients, in billions of dollars)
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
Hawaii 0.863 0.387 - 1.250
Idaho 1.250 - 0.056 1.306
Illinois 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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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 allocation total includes $0.5 billion 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 $8 billion to be distributed to tribal governments through the
CRF. The CARES Act further stipulated that fund allocations to individual tribal governments
were to be based on increases in government expenditures from FY2019 to FY2020, through a
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The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data
process established by the Department of the Treasury and Department of the Interior. 10 That
process resulted in two rounds of payments. 11 The first round of payments distributed 60% of the
tribal total, with allocations based on tribal population data. The second-round payments were
distributed based on tribal employment and expenditure data after such data were provided.
Treasury has provided all fund allocations to tribal governments except those designated for
governments of Alaska Native Corporations, whose participation is the subject of ongoing
litigation. 12
Table 2 provides estimated CRF allocations made through the CARES Act to areas designated for
fund purposes as territories, including the District of Columbia. Territory allocations are made in
direct proportion to the relevant population estimate, with no minimum amount provided.
Allocation shares for all territories except Puerto Rico are smaller than the state minimum
amount. Treasury has allocated all amounts designated for territorial governments. 13
Table 2. Total CRF CARES Act Allocations by Territory
Allocation
Territory
($ 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 allocations were provided exclusively to territorial governments.
Allocations to Governments Within States and Territories
CRF assistance is generally 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 allocations reduce the
allocation made to the state government (keeping the state allocation constant) and are equal to
the product of
the state or territory allocation 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 Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data
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 billion to local governments in
2018, or 27% of all 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, all overlapping governments are eligible for
assistance. However, direct assistance payments to larger localities will be calculated using only
their unique population, or will be reduced by any amounts also attributable to smaller 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 allocation that has been awarded to projects for each
state and type of government as of September 30, 2020. Just over half of all CRF Funds ($78.4
billion, or 52%) have been awarded to projects. State and territorial governments ($62.9 billion,
or 55%) have awarded a slightly higher percentage of their allocations to projects than local
governments ($12.6 billion, 46%) and tribal governments ($2.9 billion, 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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State or
State Territory Local Tribal Total
Florida 86% 49% 44% 75%
Georgia 29% 42% - 31%
Guam >99% - - >99%
Hawaii 10% 17% - 12%
Idaho 27% - 29% 27%
Illinois 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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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 billion in payments to governments without quarterly reporting
requirements, which are not identifiable by state and government level. Alaska tribal allocation total includes $0.5
billion 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 allocations. There is typically a lag between when
new, unexpected funds are distributed to state and local governments (which in this case generally
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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Acknowledgments
The author wishes to thank Jameson Carter, Gene Falk, and Maggie McCarty for their helpful contributions
to this report.
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Congressional Research Service R46298 · VERSION 5 · UPDATED 9