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Posted on: October 16, 2020

Hopes for Federal COVID Aid Package Dim ... Again

On Wednesday, Treasury Secretary Steve Mnuchin, the administration’s point person on COVID relief, stated, “At this point getting something done before the election and executing on that would be difficult, just given where we are in the level of details.”

In the past two weeks, President Trump first ordered his team to break off talks, then sent them back to the table, and finally called for a bigger bill than previously put forward. Recently, Senate Majority Leader Mitch McConnell stated he has no intention of accepting a deal that exceeds his previous, $500 billion, proposal. This latest news may not be the last we hear about this before Election Day. But it is no cause for optimism.

 We will continue to keep you posted on further developments. For now, we urge you to speak with your Federal Representatives. In addition to thanking them for their past support for direct aid to local governments, please remind them of these four principles: 

  1. Aid should be fair and appropriate funding for each and every local government, with no minimum population threshold for eligibility. Residents should not tolerate a preventable decline in local government operations as a result of being excluded from emergency federal aid.   
  2. Aid should be directly allocated through familiar and proven government revenue-sharing programs. Relying on a Community Development Block Grant (CDBG) framework would eliminate the time-consuming need to stand up a completely new administrative or regulatory framework, as was required by the Coronavirus Relief Fund (CRF). CDBG is also the most familiar revenue-sharing mechanism for states and localities operating at reduced capacities due to staff furloughs and layoffs. 
  3. Entanglement of state and local funding should be minimized. Unclear legislation and regulations burdened the CARES Act CRF from the start, resulting in confusion, delays, and infighting among primary and secondary grant recipients. Federal aid for states and localities should be allocated from three clearly set-aside funds for state government, municipal government, and county government. Overall federal aid for municipal governments and county governments should be provided at equal levels. 
  4. Eligible expenditures should be targeted to the widespread health and economic consequences of COVID-19, including unavoidable revenue shortfalls resulting from federal, state, and local measures to contain the spread of coronavirus. 

Contact: Jon Moran, Senior Legislative Analyst, jmoran@njlm.org, 609-695-3481 x121.

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