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Urgent Updates
You sent out lots of information last week regarding the
federal stimulus bill. But we’re still not sure what limitations will be
placed on how we spend our allocation?
At this time, neither are we. We do know that the stimulus
bill – H.R. 1319, the American Rescue Plan Act of 2021 – has
restrictions related to a state’s allocation. According to an article from the Center on Budget and Policy
Priorities:
“[T]he American Rescue Plan Act does not stop states
from cutting taxes. It says they can’t use federal dollars to do that, either
directly or indirectly. If a state chooses to enact a net tax cut, it will
forgo the equivalent amount of federal aid provided through the Act’s
Coronavirus State Fiscal Recovery Fund. According to the Act:
(A) In general.—A State or territory shall not use the funds
provided under this section or transferred pursuant to section 603(c)(4) to
either directly or indirectly offset a reduction in the net tax revenue of
such State or territory resulting from a change in law, regulation, or
administrative interpretation during the covered period that reduces any tax
(by providing for a reduction in a rate, a rebate, a deduction, a credit, or
otherwise) or delays the imposition of any tax or tax increase.
Again, states will receive $195 billion in direct fiscal aid, plus
billions more in fiscal relief for schools, counties, and cities. If
state lawmakers want to cut taxes, regardless of the impact on state
services, they can do so...”
CBPP is a research institute with a focus on how government budget
choices affect low-income Americans. The League isn’t endorsing any position
in the article, but it does clearly explain the Act’s restriction on states.
The Act has no similar provision for the city allocations, but
the United States Treasury Department may impose that condition (and perhaps
others). In addition, it appears that the Texas Division of Emergency
Management (TDEM) could be involved. (Remember that TDEM placed limitations
on prior CARES Act funds.)
Local allocations are governed by “Title IX, Subtitle M,
Section 9901: Coronavirus State and Local Fiscal Recovery Funds (see page 225 of the bill).” The bill itself provides four
eligible areas for a city’s use of its allocation:
1. to respond to the public health emergency with respect to
COVID–19 or its negative economic impacts, including assistance to
households, small businesses, and nonprofits, or aid to impacted industries
such as tourism, travel, and hospitality;
2. to respond to workers performing essential work during the
COVID–19 public health emergency by providing premium pay to eligible workers
of the local government who are performing such essential work, or by
providing grants to eligible employers that have eligible workers who perform
essential work;
3. for the provision of government services to the extent of
the reduction in revenue due to the COVID–19 public health emergency relative
to revenues collected in the most recent full fiscal year of the local
government prior to the emergency; or
4. to make necessary investments in water, sewer, or broadband
infrastructure.
The law firm of Carrington Coleman has prepared a short fact sheet about where things stand.
The National League of Cities is still working with the
Treasury Department to obtain more information as they further analyze the
legislation. We will share that in the next Update as soon as we
have it.
Further Updates
You’ve told us that the governor doesn’t plan to rescind the
Open Meetings Act suspensions for some time. But are we required to
continue holding virtual meetings?
As we reported last week, the governor, by continuing his COVID-19 disaster declaration for another 30
days, extended the Open Meetings Act suspensions for another 30 days. His
office tells League staff that he should continue doing so for the
foreseeable future. (Even if he decided to independently end the
suspensions, his staff also assured us that we would have ample notice of
that action.)
While the suspensions allow governmental bodies to conduct
meetings by telephone or video conference, they don’t require such meetings.
A city council or other governmental body that has a “normal” in-person
meeting should follow the Texas Open Meetings Act requirements as they were
prior to the suspensions. A city council that imposes some pandemic
mitigation measure (e.g., social distancing) should do the same. Consult
local legal counsel and/or the attorney general if you anticipate any locally-imposed
mitigation measure (e.g. social distancing) may impact a person’s ability to
attend an in-person meeting.
What’s the latest on vaccines?
Texans age 50 and older are now eligible to receive a COVID-19
vaccine. According to the Texas Department of State Health Services,
“Expanding to ages 50 to 64 will continue the state’s priorities of
protecting those at the greatest risk of severe outcomes and preserving the
state’s health care system.”
Where can I find archived issues of the TML Coronavirus
Updates?
TML Coronavirus Updates are archived by date here and by subject here.
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