The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Allocations (R46298, Version 1)
Summary
This Congressional Research Service report, R46298 Version 1, dated April 1, 2020, explains the Coronavirus Relief Fund created by the CARES Act on March 27, 2020, which provides $150 billion to governments. Of that, $139 billion goes to the 50 states, with no state receiving less than $1.25 billion, $8 billion is set aside for tribal governments and $3 billion for territories. Payments must cover necessary expenditures due to the COVID-19 emergency that were not in the most recently approved budget and were incurred from March 1, 2020 through December 30, 2020; the Treasury Inspector General determines eligibility. Local governments serving at least 500,000 people may elect to receive direct assistance equal to the state allocation times their population share times 45%. Table 1 puts California at $15.321 billion, and CRS calculates counties are eligible for $29.2 billion.
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The Coronavirus Relief Fund (CARES Act,
Title V): Background and State and Local
Allocations
Grant A. Driessen
Analyst in Public Finance
April 1, 2020
Congressional Research Service
7-....
www.crs.gov
R46298
SUMMARY
R46298
The Coronavirus Relief Fund (CARES Act, Title
April 1, 2020
V): Background and State and Local Allocations Grant A. Driessen
The sudden decline in economic output following the Coronavirus disease 2019 (COVID-19) Analyst in Public Finance
outbreak has significantly altered the fiscal outlook for state and local governments. A sizable -redacted-@crs.loc.gov
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. Early evidence For a copy of the full report,
suggests that the COVID-19 economic shock will have a notable impact on state and local please call 7-.... or visit
budgets. www.crs.gov.
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, which provides $150 billion in direct assistance for domestic governments. The CARES
Act stipulates that the $150 billion provided to the Coronavirus Relief Fund is allocated to governments in states, territories,
and tribal areas as follows: (1) $139 billion is allocated to state governments in the 50 states, with allocations based on their
populations and with no state receiving less than $1.25 billion; (2) $8 billion is set aside for governments in tribal areas; and
(3) $3 billion is allotted to governments in territories, including the District of Columbia and Puerto Rico.
Coronavirus Relief Fund assistance is provided to state governments. Local governments serving a population of at least
500,000, as measured in the most recent census data, may elect to receive assistance directly from Treasury. Such direct local
assistance allocations reduce the allocation that is made to the state government (keeping the state allocation constant), and
are equal to 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%.
Congressional Research Service
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Contents
Background ............................................................................................................................... 1
Eligible Purposes ....................................................................................................................... 2
Allocations Across States, Territories, and Tribal Areas ........................................................... 2
Allocations to Governments Within States and Territories ....................................................... 5
Tables
Table 1. Estimated Fund Allocations by State ................................................................................. 3
Table 2. Estimated Fund Allocations by Territory ........................................................................... 5
Table 3. Estimates of Counties with Direct Assistance Eligibility by State and Territory .............. 6
Contacts
Author Contact Information ............................................................................................................ 7
Congressional Research Service
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
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.
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, which provides $150
billion in direct assistance for state and local governments. This report briefly summarizes the
background, purpose, and allocation details of the Coronavirus Relief Fund. Table 1 provides
Congressional Research Service (CRS) estimates of Coronavirus Relief Fund allocations to states,
Table 2 provides allocation amounts to territories, and Table 3 shows CRS estimates of county-
level eligibility for local government assistance by state and territory.
Background
A sizable share of economic output derives from state and local government activity. State and
local governments spent $3.7 trillion in 2017, 19% of gross domestic product (GDP), divided
about equally across state governments (55% of combined state and local expenditures) and local
governments (45% of combined state and local expenditures). 1 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.
Early 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
own-source revenues in 2017). Spikes in unemployment and decreased firm profitability are
expected to have a similar effect on individual and corporate income tax receipts (26% of own-
source revenues). 2 Use of state and local spending programs is likely to increase, particularly for
public welfare programs (19% of 2017 expenditures) as well as hospital and public health
expenses (8% of 2017 expenditures).
The Coronavirus Relief Fund, established through Section 5001 of the CARES Act, offers a
means of assistance for state and local governments. The Coronavirus Relief Fund provides a
total of $150 billion in federal fiscal support for state and local governments, with eligibility
dependent upon the location, level of government, and use of potential funds. 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. 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 education programs.3
1 All state and local government finance data used in this report draw from U.S. Census Bureau, “2017 Survey of State
& Local Government Finances,” October 2019, available at https://www.census.gov/programs-surveys/gov-
finances.html.
2 There are no indications as yet of a comparable effect on the base for property taxes (32% of 2017 own-source
revenues), which are predominantly collected by local governments.
3 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.
Congressional Research Service 1
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Eligible Purposes
Section 5001(d) of the CARES Act provides the eligible purposes for which Coronavirus Relief
Fund payments may be used. Specifically, it allows 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
30, 2020.4
Per Section 5001(f) of the CARES Act, the Inspector General of the Department of the Treasury
determines whether Coronavirus Relief Fund 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.
Coronavirus Relief Fund payments may not be used to directly account for revenue shortfalls
related to the COVID-19 outbreak. Such funds, however, may indirectly assist with revenue
shortfalls in cases where expenses paid for by the Coronavirus Relief Fund would otherwise
widen the gap between government outlays and receipts. For instance, if $3 billion in Coronavirus
Relief Fund 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 Coronavirus Relief Fund assistance despite its decrease in revenues.
Allocations Across States, Territories, and Tribal Areas
The CARES Act stipulates that the $150 billion provided to the Coronavirus Relief Fund is
allocated to governments in states, territories, and tribal areas as follows:5
$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.
$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
4 Section 5001(d) of the CARES Act, p. 603.
5 This 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.
Congressional Research Service 2
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
population across all territories, with populations determined by the Secretary of
the Treasury.
Table 1 shows CRS estimates for Coronavirus Relief Fund allocations to states. Due to the $1.25
billion minimum allocation for states, every state with an allocation greater than the minimum
amount receives a smaller allocation share (excluding amounts provided to tribal areas) than its
share of the population. Most states with a minimum allocation amount, in contrast, have a larger
allocation share than their population share.
Table 1. Estimated Fund Allocations by State
Allocation
State Allocation % Population Population %
($ Billions)
Alabama 1.901 1.4 4,903,185 1.5
Alaska 1.250 0.9 731,545 0.2
Arizona 2.822 2.0 7,278,717 2.2
Arkansas 1.250 0.9 3,017,804 0.9
California 15.321 11.0 39,512,223 12.1
Colorado 2.233 1.6 5,758,736 1.8
Connecticut 1.382 1.0 3,565,287 1.1
Delaware 1.250 0.9 973,764 0.3
Florida 8.328 6.0 21,477,737 6.6
Georgia 4.117 3.0 10,617,423 3.2
Hawaii 1.250 0.9 1,415,872 0.4
Idaho 1.250 0.9 1,787,065 0.5
Illinois 4.914 3.5 12,671,821 3.9
Indiana 2.610 1.9 6,732,219 2.1
Iowa 1.250 0.9 3,155,070 1.0
Kansas 1.250 0.9 2,913,314 0.9
Kentucky 1.732 1.2 4,467,673 1.4
Louisiana 1.803 1.3 4,648,794 1.4
Maine 1.250 0.9 1,344,212 0.4
Maryland 2.344 1.7 6,045,680 1.8
Massachusetts 2.673 1.9 6,892,503 2.1
Michigan 3.873 2.8 9,986,857 3.0
Minnesota 2.187 1.6 5,639,632 1.7
Mississippi 1.250 0.9 2,976,149 0.9
Missouri 2.380 1.7 6,137,428 1.9
Montana 1.250 0.9 1,068,778 0.3
Nebraska 1.250 0.9 1,934,408 0.6
Nevada 1.250 0.9 3,080,156 0.9
New Hampshire 1.250 0.9 1,359,711 0.4
Congressional Research Service 3
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Allocation
State Allocation % Population Population %
($ Billions)
New Jersey 3.444 2.5 8,882,190 2.7
New Mexico 1.250 0.9 2,096,829 0.6
New York 7.543 5.4 19,453,561 5.9
North Carolina 4.067 2.9 10,488,084 3.2
North Dakota 1.250 0.9 762,062 0.2
Ohio 4.533 3.3 11,689,100 3.6
Oklahoma 1.534 1.1 3,956,971 1.2
Oregon 1.635 1.2 4,217,737 1.3
Pennsylvania 4.964 3.6 12,801,989 3.9
Rhode Island 1.250 0.9 1,059,361 0.3
South Carolina 1.996 1.4 5,148,714 1.6
South Dakota 1.250 0.9 884,659 0.3
Tennessee 2.648 1.9 6,829,174 2.1
Texas 11.243 8.1 28.995,881 8.9
Utah 1.250 0.9 3,205,958 1.0
Vermont 1.250 0.9 623,989 0.2
Virginia 3.310 2.4 8,535,519 2.6
Washington 2.953 2.1 7,614,893 2.3
West Virginia 1.250 0.9 1,792,147 0.5
Wisconsin 2.258 1.6 5,822,434 1.8
Wyoming 1.250 0.9 578,759 0.2
Total 139.000 100.0 327,533,774 100.0
Source: Calculated by the Congressional Research Service. U.S. Census Bureau and the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act; P.L. 116-136).
Note: Allocation and population percentages do not include the $8 billion in assistance provided to tribal
governments.
Table 2 provides Coronavirus Relief Fund estimated allocations made to territories. As defined in
Section 5001(c)(8) of the CARES Act, which specifies that population data draw from “the most
recent year for which data are available from the Bureau of the Census,” the relevant populations
for DC and Puerto Rico draw from 2019 census estimates, while populations for the other
territories draw from 2010 census estimates. Territory allocations are made in direct proportion to
the relevant population estimate, with no minimum amount provided. Allocation shares for all
territories except Puerto Rico are smaller than the state minimum amount.
Congressional Research Service 4
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Table 2. Estimated Fund Allocations by Territory
Allocation Allocation and
Territory Population Year Population
($ Billions) Population %
American Samoa 0.039 2010 55,519 1.3
District of Columbia 0.495 2019 705,749 16.5
Guam 0.112 2010 159,538 3.7
Northern Mariana Islands 0.038 2010 53,883 1.3
Puerto Rico 2.241 2019 3,193,694 74.7
U.S. Virgin Islands 0.075 2010 106,405 2.5
Total 3.000 4,274,608 100.0
Source: Calculated by the Congressional Research Service. U.S. Census Bureau and the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act; P.L. 116-136).
Note: Allocation and population percentages do not include the $8 billion in assistance provided to tribal
governments.
Allocations to Governments Within States and Territories
Coronavirus Relief Fund 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,
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;
the percentage of the state or territory population served by the local government;
and
45%.6
The CARES Act does not explicitly prevent local governments (regardless of their eligibility for
direct assistance) from receiving Coronavirus Relief Fund payments from state governments, so
long as the funds are used for eligible purposes. State governments transferred $534 billion to
local governments in 2017, or 28% of all local government revenues.
Table 3 provides CRS estimates of the number of counties in each state eligible for direct
assistance and the total available assistance for eligible county governments. Direct assistance
eligibility varies greatly across states, ranging from those with no eligible counties (20 states) to
those with county governments eligible for 38% of a state’s allocation (Massachusetts and
California). In total, CRS calculates that county governments are eligible to receive $29.2 billion
(21% of nontribal allocations) in direct assistance.
The figures in Table 3 assume that county governments are eligible for the full amounts provided
for in Section 5001 of the CARES Act, regardless of whether underlying city governments are
also eligible for direct assistance. In many cases, populations are served by more than one local
government that is eligible for direct assistance from the Coronavirus Relief Fund (e.g., city
governments and county governments for large cities). There are also cases, such as those where a
city includes jurisdictions in multiple counties, where local governments other than county
6 Section 5001(c)(5) of the CARES Act.
Congressional Research Service 5
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
governments may have increased eligibility or direct assistance availability relative to what is
provided in Table 3. The Secretary of the Treasury will determine how to allocate direct
assistance to qualifying local governments.
Table 3. Estimates of Counties with Direct Assistance Eligibility by State and
Territory
Total Available
State Eligible Counties Assistance ($ Billions) % of State Allocation
Alabama 1 0.115 6.0
Alaska 0 — —
American Samoa 0 — —
Arizona 2 0.965 34.2
Arkansas 0 — —
California 16 5.796 37.8
Colorado 5 0.559 25.0
Connecticut 3 0.469 33.9
Delaware 1 0.323 25.8
District of Columbia 0 — —
Florida 12 2.472 29.7
Georgia 4 0.614 14.9
Guam 0 — —
Hawaii 1 0.387 31.0
Idaho 0 — —
Illinois 5 1.395 28.4
Indiana 1 0.168 6.4
Iowa 0 — —
Kansas 2 0.216 17.3
Kentucky 1 0.134 7.7
Louisiana 0 — —
Maine 0 — —
Maryland 5 0.691 29.5
Massachusetts 7 1.017 38.1
Michigan 4 0.792 20.4
Minnesota 2 0.317 14.5
Mississippi 0 — —
Missouri 2 0.296 12.4
Montana 0 — —
Nebraska 1 0.166 13.3
Nevada 1 0.414 33.1
New Hampshire 0 — —
Congressional Research Service 6
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Total Available
State Eligible Counties Assistance ($ Billions) % of State Allocation
New Jersey 9 1.050 30.5
New Mexico 1 0.182 14.6
New York 6 2.408 31.9
North Carolina 3 0.481 11.8
North Dakota 0 — —
Northern Mariana Islands 0 — —
Ohio 5 0.775 17.1
Oklahoma 2 0.253 16.5
Oregon 2 0.247 15.1
Pennsylvania 7 1.029 20.7
Puerto Rico 0 — —
Rhode Island 1 0.339 27.1
South Carolina 1 0.091 4.6
South Dakota 0 — —
Tennessee 2 0.285 10.7
Texas 12 3.205 28.5
U.S. Virgin Islands 0 — —
Utah 2 0.315 25.2
Vermont 0 — —
Virginia 1 0.200 6.0
Washington 4 0.786 26.6
West Virginia 0 — —
Wisconsin 2 0.260 11.5
Wyoming 0 — —
United States 136 29.214 20.6
Source: Calculated by the Congressional Research Service. U.S. Census Bureau and the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act; P.L. 116-136).
Notes: The fund does not provide for direct assistance to local governments within tribal areas. Allocation
percentages in this table therefore exclude amounts set aside for tribal governments. Estimates assume that
county governments are eligible for the full amounts provided for in Section 5001 of the CARES Act.
Author Contact Information
Grant A. Driessen
Analyst in Public Finance
[redacted]@crs.loc.gov, 7-....
Congressional Research Service 7
The Coronavirus Relief Fund (CARES Act, Title V): State and Local Allocations
Acknowledgments
The author wishes to thank Jameson Carter, Gene Falk, and Maggie McCarty for their helpful contributions
to this report.
Congressional Research Service R46298 · VERSION 1 · NEW 8
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