Funding for Local Communities Would Provide Necessary Relief for Lost Revenues, Increased Costs While Avoiding Local Tax & Fee Increases

Washington, D.C. — Colorado U.S. Senator Michael Bennet and U.S. Senators Kirsten Gillibrand (D-N.Y.), Chuck Schumer (D-N.Y.), Doug Jones (D-Ala.), Joe Manchin (D-W.Va.), Sherrod Brown (D-Ohio), and Gary Peters (D-Mich.) announced a plan to provide local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the Coronavirus Disease 2019 (COVID-19) pandemic response efforts. This local assistance would complement direct relief to states, which is also vital in this crisis.  

Concerned about the layoffs of public health care workers, firefighters, police, sanitation workers, teachers, and other vital public servants across the country, Bennet and the senators are fighting to ensure that all counties, cities, and towns — regardless of size — have the financial resources necessary to continue to provide critical services. The direct relief will help local governments avoid local tax and fee increases that will further burden cash-strapped families and businesses in this crisis.

“Local governments on the front lines of addressing the pandemic are facing increased costs at the same time as they are dealing with collapsing revenues. This bill is a first step toward ensuring that communities of all sizes receive their fair share of support to weather this once-in-a-century crisis,” said Bennet. “We cannot allow massive cuts to critical services in counties, small towns, and cities across the country if we want to protect public health and address the economic challenges we face.”

“It has never been more important to support local governmental public agencies efforts to both prevent transmission and mitigate consequences of communicable disease in individual communities. It is imperative that local governments have sufficient resources for public health activities as we move into the next phases of this devastating global pandemic,” said Liane Jolon, President of the Board of Directors at the Colorado Association of Local Public Health Officials. “If we do not have resources now and in the future to prevent, investigate, control and respond to the spread of COVID-19, we run unnecessary risk for not only continued resurgence of cases, but also preventable deaths and slowed recovery in every facet of community resilience.”

“Counties are fighting on the front lines against the far-reaching effects of COVID-19 on our public health, safety, and economy,” said John Swartout, Executive Director of Colorado Counties Inc.“CCI appreciates Senator Bennet’s tireless advocacy to support us with much-needed federal relief for counties across our state.  This support will be critical to help us emerge from this crisis without devastating cuts to essential county functions that will further harm our economy and public health.”

“Municipalities are on the front lines battling COVID-19 while supporting local businesses that have been shuttered,” said Colorado Municipal League Executive Director Kevin Bommer. “CML and our 270 member cities and towns are united in support for stabilization to ensure that critical services can continue to be delivered. We are grateful for Senator Bennet’s continued leadership and commitment to municipalities and the dedicated elected officials and employees who serve the public.”

  Under the proposed bill, the local relief fund would be split 50/50, half committed to cities and towns and half committed to counties:

• Of the portion allocated for cities and towns, 70 percent would go to Community Development Block Grant (CDBG) entitlement communities using the CDBG formula through the Department of Housing and Urban Development (HUD) to allocate the funding.
• The remaining 30 percent for cities and towns would be sent to states, which would be required to sub-allocate the entire amount within 30 days to all non-entitlement communities in the state based on population.
• The portion of emergency fiscal assistance for counties would be allocated across all counties based on population. The exception to that formula is that a current CDBG entitlement county would receive its entitlement amount if it is higher than what that county would receive under an allocation based on population.

Local governments would be able to use this federal relief to help address costs associated with lost revenues and respond to the pandemic. It would also help avoid cuts to essential services or local tax and fee increases. This proposed formula for local fiscal relief is intended to be incorporated into a larger legislative package that will also include fiscal relief for state and tribal governments and retroactive availability to use the Coronavirus Relief Fund in the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act for lost revenues.