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Jul 23

July 23, 2020 TML Coronavirus Update #90

Posted on July 23, 2020 at 2:52 PM by TML Staff

Urgent Updates


What’s the latest with regard to federal stimulus funding?


According to the National League of Cities (NLC), Senate Majority Leader Mitch McConnell is expected to release the senate’s proposal soon. With regard to state and local government assistance, NLC’s intelligence shows that no additional funds will be allocated for state and local governments in that proposal. However, additional funding will be a negotiating point with the House, and it will likely end up in some form in the final bill.


With regard to the existing CARES Act funds, the Senate plan is said to do the following:


-Change current law to allow state and local governments to use funds for lost revenue purposes.

-Extend the date by which funds must be spent from December 30 to 90 days after the end of the fiscal year.  

-Mandate that states give at least 15 percent of funds to local governments, with guidance that they be given at least 45 percent.  

-May not use funds for pensions/retirement benefits or to replenish state or local “rainy day” funds.

-States must maintain their own budgeted spending levels (i.e., states can't use the federal dollars to replace state spending)

-States may not impose any restrictions on the use of CARES Act money by their local governments other than those set in the CARES Act and associated Treasury Department guidance.  [Editor’s note: Texas has imposed restrictions on cities that receive the funds from TDEM.]


NLC plans to release a statement calling for new funding given that flexibility will not be enough to help cities through this pandemic. NLC believes this is a multi-year problem given unemployment is so high and cities continue to see revenue losses. The need is greater than when CARES Act was passed given overall state and local shortfalls.


Further Updates


Where can I find archived issues of the TML Coronavirus Updates?


TML Coronavirus Updates are archived by date here and by subject here.