In11351 Covid State Local Fiscal Conditions
Summary
Congressional Research Service Insight IN11351, COVID-19 and State and Local Fiscal Conditions: Select Resources on Current Status, Impacts, and Federal Relief, dated April 22, 2020. It states that COVID-19 has altered the fiscal outlook for state and local governments and directs readers to selected CRS products and other resources. The CRS products it names include Report R46298 on the $150 billion Coronavirus Relief Fund under the CARES Act (P.L. 116-136) and Insights IN11258 and IN11327. The relief section describes the Treasury Coronavirus Relief Fund, which must be spent by December 31, 2020, and the Federal Reserve Municipal Lending Facility, with a Treasury initial investment of $35 billion supporting up to $500 billion. It also points to resources from state and local organizations, research groups and the Census Bureau.
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INSIGHTi
COVID-19 and State and Local Fiscal
Conditions: Select Resources on Current
Status, Impacts, and Federal Relief
April 22, 2020
The coronavirus (COVID-19) has caused a sudden decline in economic output and surge in
unemployment, and it has significantly altered the fiscal outlook for state and local governments. State
and local governments use taxes and receipts, debt issuances, and intergovernmental transfers to support
spending programs. And, unlike the federal government, states and local governments are generally
required to balance their operating budgets every one or two years. Even before the pandemic, a 2019
Government Accountability Office report on state and local governments’ fiscal outlook suggested that
states and localities will have an increasingly difficult time generating sufficient revenues over the next 50
years to sustain current levels of government services. Early indications suggest that the COVID-19
economic shock will add to those difficulties by having a notable impact on state and local budgets, with
both significant revenue decreases and additional spending pressures expected. This CRS Insight is
intended to direct readers to selected CRS products and other resources related to COVID-19 and state
and local government fiscal conditions.
CRS Products
CRS Report R46298, The Coronavirus Relief Fund (CARES Act, Title V): Background and State and
Local Allocations, by Grant A. Driessen. The report includes details on the Coronavirus Relief Fund, a
$150 billion state and local stabilization fund enacted as part of the CARES Act (P.L. 116-136) and
administered by the Department of the Treasury. The report also includes tables listing estimated fund
allocations for each of the states and territories.
CRS In Focus IF11502, State and Local Government Debt and COVID-19, by Grant A. Driessen. The In
Focus discusses state and municipal debt issuances in light of recent economic and legislative
developments.
Congressional Research Service
https://crsreports.congress.gov
IN11351
CRS INSIGHT
Prepared for Members and
Committees of Congress
Congressional Research Service 2
CRS Insight IN11258, State and Local Fiscal Conditions and Economic Shocks, by Grant A. Driessen.
The Insight discusses fiscal conditions of state and local governments and tools available to help them
weather economic shocks.
CRS Insight IN11327, Federal Reserve: Emergency Lending in Response to COVID-19, by Marc
Labonte. The Insight details some of the Federal Reserve’s (Fed) Emergency Lending Programs in
relation to COVID-19. It includes brief details on the Fed’s Municipal Lending Facility, which is
available to purchase debt from larger counties and cities.
For a list of all CRS products related to COVID-19, see the CRS COVID-19 Resources page.
Relief Programs
Department of the Treasury, Coronavirus Relief Fund
The Department of the Treasury, Coronavirus Relief Fund resource page, includes details on the
implementation of the $150 billion Coronavirus Relief Fund created under Title V of the CARES Act
(P.L. 116-136). The fund provides for payments to state, local, and tribal governments navigating the
impact of the COVID-19 outbreak. The CARES Act specifies that payments from the fund must be used
for necessary, unplanned expenditures and spent by December 31, 2020. The Treasury resource page
outlines the requirements under the CARES Act, eligible uses for the fund, and the distribution
methodology for fund allocations to states and eligible localities.
Federal Reserve, Municipal Lending Facility
The Federal Reserve announced on April 9, 2020, that the Municipal Lending Facility will be available to
purchase state and municipal debt. The facility will only purchase debt of larger counties and cities.
Treasury issued a statement on April 9, 2020, that it would provide an initial investment of $35 billion to
the facility, which would be available to support up to $500 billion in total investments. More details on
the facility are available in the Fed’s Municipal Lending Facility Term Sheet.
State and Local Organizations
National Association of State Budget Officers
The National Association of State Budget Officers (NASBO) has historical reports and data related to
state fiscal conditions. NASBO’s COVID-19 resources, individual state revenue forecasts, and press clips
(organized by state) may be useful for those seeking details on the fiscal impact of COVID-19.
National Conference of State Legislatures
The National Conference of State Legislatures has resources on state budgetary conditions and COVID-
19, including lists of federal and state-level budget and revenue actions taken in response to the outbreak.
National Association of Counties
The National Association of Counties provides a number of online resources for county tax and finance
data as well as reports and toolkits about county-level coronavirus responses.
Congressional Research Service 3
National League of Cities
The National League of Cities has reports on cities’ finances and COVID-19 resources.
Other Resources
How Will States and Localities Divide the Fiscal Relief in the Coronavirus Relief Fund?
(Center on Budget and Policy Priorities)
State Budget and Tax (multiple articles, Center on Budget and Policy Priorities)
State Rainy Day Funds and the COVID-19 Crisis (Tax Foundation)
COVID-19: Policies to Protect People and Communities, States and Localities (multiple
articles, Urban Institute)
Improving the equity impact of the Fed’s municipal lending facility (Brookings
Institution)
State Fiscal Health (multiple articles, Pew Charitable Trusts)
Applying and Adapting Lessons from the 2009 Stimulus (IBM Center for the Business of
Government)
Census Bureau, Annual Survey of State and Local Governments
The Census Bureau’s Annual Survey of State and Local Governments provides statistics on revenue,
expenditure, debt, and assets for each of the 50 states and the District of Columbia. The survey includes
details on specific categories of receipts, spending, and borrowing, and divides the totals within each state
by the amounts attributable to the state government and those attributable to all other (e.g., local)
governments. Intergovernmental transfer data for federal, state, and local governments are also included
in the survey. The latest survey data available are from 2017.
Wolters Kluwer, Interactive Chart Comparing State Legislation for COVID-19
Legal publisher Wolters Kluwer has made available for free an interactive smart chart that compares
COVID-19 related state and federal legislation. The resource includes a filter for the CARES Act and
state stimulus programs.
Electronic Municipal Market Access
The Electronic Municipal Market Access website is an official source for municipal securities data and
disclosure documents. The site provides information, resources, and data related to municipal securities.
The site recently featured documents related to the market and COVID-19.
Congressional Research Service 4
Author Information
Grant A. Driessen Maria Kreiser
Analyst in Public Finance Senior Research Librarian
Jared C. Nagel
Senior Research Librarian
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
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as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.
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