Federal COVID-19 Relief Package Signed Into Law

January 4, 2021

The law includes several provisions that will benefit cities and residents, but it does not contain direct flexible aid to cities to deal with costs and revenue losses related to COVID-19.

A new federal COVID-19 aid package that was signed into law on Dec. 27 contains some key local priorities but does not include the direct flexible assistance to local governments that the League of Minnesota Cities (LMC) and the National League of Cities (NLC) have been advocating for.

LMC and NLC have been asking Congress for funding that would allow cities to cover unbudgeted pandemic-related costs and lost revenue. The previous Coronavirus Relief Funds provided to cities through the Coronavirus Aid, Relief, and Economic Security (CARES) Act did not cover revenue losses due to COVID-19.

While the new package — which also funds the federal government through September 2021 — fails to provide any additional direct relief to state or local governments, it does extend the deadline to Dec. 31, 2021, to use any unspent Coronavirus Relief Funds. However, it doesn’t provide any additional flexibility for the use of those funds. The extension is likely to help only the state of Minnesota since local governments in Minnesota were required to return unused funds to the state by Nov. 15.

Provisions that benefit cities and residents

The package does include provisions that will benefit cities and their residents as the long-term challenges of the pandemic continue. Provisions that will provide much-needed relief include:

  • $25 billion for rental assistance.
  • Extension of the federal eviction moratorium through Jan. 31, 2021.
  • Extension of foreclosure protection for any mortgages backed by the Federal Home Administration until Feb. 28, 2021.
  • $325 billion in small business aid, $285 billion of which is another round of modified Paycheck Protection Program loans, along with $20 billion in Economic Injury Disaster Loan Advance Program funding and $15 billion to support closed performance and entertainment venues.
  • $45 billion for transportation, including $14 billion in additional transit support, $10 billion in additional surface transportation block grant funding, and $2 billion for primary and general aviation airports.
  • $54.3 billion for public K-12 schools and $10 billion for child care (funding the Child Care & Development Block Grant and Head Start).
  • $13 billion for the Supplemental Nutrition Assistance Program.
  • $7 billion for broadband, $3.2 billion of which is dedicated to a low-income broadband emergency subsidy for households along with $300 million for rural broadband.
  • $4.25 billion to provide increased mental health and substance abuse services and support, including $1.65 billion for the Substance Abuse and Prevention Treatment Block Grant.

Advocacy for city aid to continue

Congressional leadership and President-elect Joe Biden have indicated that funding for state and local governments will continue to be a priority for the next Congress and the new administration. LMC and NLC will continue to work with the new Congress and advocate for flexible and direct federal funding for cities of all sizes.

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