As Ohio’s economy continues to decline due to the COVID-19 outbreak many of Ohio’s local governments who are on the front lines dealing with the impacts of the virus are experiencing decreased revenues as well and in some cases increased cost. In March of this year, Congress passed the CARES act, which provided a number of programs to help individuals, businesses, and governments deal with the fallout of the outbreak and the impact on the economy. One area of the CARES act which has an impact on Ohio’s local governments was the creation of the Coronavirus Relief Fund.
The Coronavirus Relief Fund provided $4.5 billion in funds to Ohio not including funding for K-12 education and Higher Education. Approximately $775 Billion of the $4.5 Billion will be provided as direct funding to cities and counties which meet the CARES act criteria. In Ohio that includes the City of Columbus, and the Counties of Cuyahoga, Hamilton, Montgomery, Summit, & Franklin. The remainder of the funds are divided by the CARES act with 55% staying with the state and 45% distributed to local governments i.e. counties, cities, and townships. The CARES act also established criteria for how these funds can be used. Below are the criteria established in the authorizing language passed by Congress.
(1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
(2) were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
(3) were incurred during the period that begins on March 1, 2020 and ends on December 30, 2020.
The U.S. Department of Treasury recently released additional guidance to provide further insight into the three criteria listed above; https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-Guidance-for-State-Territorial-Local-and-Tribal-Governments.pdf
That guidance describes what are permissible and non-permissible uses of these funds. For example, to Department of Treasury guidance specifically says these funds cannot be used to replaced lost revenue:
Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments.
Treasury does provide a list of eligible expenditures for states and local governments: Eligible expenditures include, but are not limited to, payment for:
- Medical expenses such as:
- COVID-19-related expenses of public hospitals, clinics, and similar facilities.
- Expenses of establishing temporary public medical facilities and other measures to increase
- COVID-19 treatment capacity, including related construction costs.
- Costs of providing COVID-19 testing, including serological testing.
- Emergency medical response expenses, including emergency medical transportation, related to COVID-19.
- Expenses for establishing and operating public telemedicine capabilities for COVID-19- related treatment.
- Public health expenses such as:
- Expenses for communication and enforcement by State, territorial, local, and Tribal governments of public health orders related to COVID-19.
- Expenses for acquisition and distribution of medical and protective supplies, including sanitizing products and personal protective equipment, for medical personnel, police officers, social workers, child protection services, and child welfare officers, direct service providers for older adults and individuals with disabilities in community settings, and other public health or safety workers in connection with the COVID-19 public health emergency.
- Expenses for disinfection of public areas and other facilities, e.g., nursing homes, in response to the COVID-19 public health emergency.
- Expenses for technical assistance to local authorities or other entities on mitigation of COVID-19-related threats to public health and safety.
- Expenses for public safety measures undertaken in response to COVID-19.
- Expenses for quarantining individuals.
- Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID- 19 public health emergency.
- Expenses of actions to facilitate compliance with COVID-19-related public health measures, such as:
- Expenses for food delivery to residents, including, for example, senior citizens and other vulnerable populations, to enable compliance with COVID-19 public health precautions.
- Expenses to facilitate distance learning, including technological improvements, in connection with school closings to enable compliance with COVID-19 precautions.
- Expenses to improve telework capabilities for public employees to enable compliance with COVID-19 public health precautions.
- Expenses of providing paid sick and paid family and medical leave to public employees to enable compliance with COVID-19 public health precautions.
- COVID-19-related expenses of maintaining state prisons and county jails, including as relates to sanitation and improvement of social distancing measures, to enable compliance with COVID-19 public health precautions.
- Expenses for care for homeless populations provided to mitigate COVID-19 effects and enable compliance with COVID-19 public health precautions.
- Expenses associated with the provision of economic support in connection with the COVID-19 public health emergency, such as:
- Expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by required closures.
- Expenditures related to a State, territorial, local, or Tribal government payroll support program.
- Unemployment insurance costs related to the COVID-19 public health emergency if such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
- Any other COVID-19-related expenses reasonably necessary to the function of government that satisfy the Fund’s eligibility criteria.
There are additional policy questions to be made regarding the distribution of the funds. The CARES act did not establish a way for the funds to be distributed beyond those governmental entities identified in the legislation, once they are provided to the states. Additionally, other legislative action from the Ohio General Assembly will likely be needed to distribute these funds due to the need of these new dollars to be appropriated by the state prior to their distribution to both local governments and executive agencies.