Thank You for “CAREing!”
On March 27, President Trump signed the CARES Act into law, providing $2 trillion in financial aid to families and businesses impacted by the COVID-19 pandemic. $150 billion of this $2 trillion was allocated to states.
The CARES Act specifies that the $150 billion in funds may be used for emergency expenses or for newly adopted programs. Unfortunately, the current guidance prohibits states or local governments from using the aid to offset lost revenues and pay for expenses that were already budgeted for prior to the emergency.
With businesses being shut down in response to stay-at-home orders and direct health measures, local governments are losing millions of dollars in tax revenue. This revenue is needed to provide for essential services, particularly public safety.
By not allowing the funds to be used to offset these lost revenues, much of the funding will remain unused.
A few weeks ago, the Platte Institute co-authored a letter that was signed by several think tanks across the country. It highlighted these concerns. The letter called on Congress to provide additional financial flexibility for states and local governments in the federal CARES Act relief package.
On May 1, Congressman Don Bacon introduced HR6652, the FLEX Act – “Flexibility for Localities and Eligibility Expansion Act of 2020’’ – to amend the CARES Act. If the bill passes and gets signed into law, local governments across the country will be able to use CARES Act funds to offset lost revenue and maintain essential services.
Thank you, Congressman Bacon, for listening to local officials and policy leaders and bringing forth a solution to support essential services and keep citizens safe!