The legislation, which includes an allocation of $375 billion to local governments across the country, is unlikely to be passed by the Senate.
The U.S. House of Representatives passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act on May 15 by a vote of 208-199.
The bill now goes to the Senate but is unlikely to be acted upon as written.
The bill allocates $375 billion to local governments and creates a new Coronavirus Local Fiscal Relief Fund to help cities across the country continue to provide critical services needed during the pandemic. Those services include public safety, first responders, transit, fire, sanitation, and many more.
The HEROES Act expands the use of funds appropriated in the CARES Act to cover lost, delayed, or decreased revenue stemming from the public health emergency.
Allocation of funds
Money from the Coronavirus Local Government Relief Fund will be allocated in two separate phases (two-thirds of the funding within 30 days, and the remaining one-third of funding between April 15 and May 3, 2021) and is split 50/50 between counties and cities.
The $187.5 billion that cities are entitled to would be allocated in two ways:
- Through a Community Development Block Grant formula to entitlement cities over 50,000 in population.
- Through a per-capita formula via the state to cities under 50,000 in population.
Funding could be used for budget shortfalls due to COVID-19. Language in the bill also includes an amendment to the CARES Act that would allow states and local units of government to use funds for “lost, delayed, or decreased revenues, stemming from the public healthy emergency with respect to COVID-19.”
Additional allocations and provisions
Other provisions in the bill include:
- $8.8 billion in emergency broadband funding.
- $300 million in additional funding for Byrne Justice Assistance Grants to provide assistance for law enforcement and emergency services responding to COVID-19.
- $200 million in funding for the Emergency Food and Shelter Program.
- Removal of a provision in the CARES Act that prohibited local governments from receiving paid sick and family leave tax credits.
League to continue seeking city COVID funding
The League of Minnesota Cities has communicated with all eight of Minnesota members of the U.S. House, urging them support the bill. The League specifically asked for direct funding to cities to deal with the economic impact of the COVID-19 outbreak.
LMC understands that this bill is an important first step toward a negotiation between the House and the Senate. We will continue to work on bicameral, bipartisan legislation that will provide funding to all cities, towns, and villages and a complete American economic recovery.
In a study released last week, the National League of Cities (NLC) says that cities across the country anticipate a $360 billion revenue shortfall as a result of the pandemic.