ICMA Presses for Additional Stimulus Funding

Priorities include direct aid for local governments under 500,000; emergency paid leave tax credits; and a waiver for federal cost shares for FEMA grants

By Elizabeth Kellar | Apr 19, 2020 | ARTICLE

ICMA's April 18 letter to Congressional leaders urges the federal government to provide additional aid to stabilize local government finances, emphasizing these priorities:

  1. Allow all local governments, including those with a population under 500,000, to be eligible to receive direct grants for emergency COVID-19 expenditures.  Amend the language in the CARES Act to include COVID-19 revenue shortfalls in the calculations.
  2. Waive all federal cost shares requirements for FEMA grants. Raising the federal cost share has been done after many major disasters, including Hurricane Sandy (2012), the flooding in Louisiana in (2016), and Hurricane Irma (2019).  
  3. Make state and local governments eligible for the emergency paid leave tax credits that were provided to the private sector in the Families First Coronavirus Response Act.
  4. Restore Advance Refunding of Tax-Exempt Bonds (H.R. 2772): Restoring the ability for governments and other qualifying entities to advance refund tax-exempt municipal bonds would free up billions of dollars that governments and nonprofits could spend on other projects.

More COVID19 Policy Updates

In other coronavirus news, the U.S. Department of Treasury has issued initial guidance related to the Economic Stabilization Fund in the CARES Act. More specific guidance on eligible expenses is expected soon. 

Fifty percent of the CARES Economic Stabilization Fund money has been distributed to states.  Some states that anticipate getting a large distribution have begun to discuss how they might distribute it to local governments under 500,000 in population. For more details on all three federal legislative packages, see ICMA’s recorded event and the related PowerPoint.

The Big 7 associations have written letters to Congressional leadership and the White House urging additional financial assistance and support for the following:

  • Make local governments with populations under 500,000 eligible to receive direct grants for emergency COVID-19 expenditures.
  • Amend the CARES Act to allow reimbursements for revenue shortfalls that are related COVID-19, in addition to expenses.
  • ICMA, the National League of Cities, National Association of Counties, U.S. Conference of Mayors, and Government Finance Officers Association support a bipartisan effort to make state and local governments eligible for emergency paid leave tax credits that were provided to the private sector in the Families First Coronavirus Response Act.

The Big 7, GFOA, and other emergency management associations have requested that the Administration waive all federal cost shares requirements for FEMA grants related to the President’s Emergency Declaration and subsequent Disaster Declarations.  They also ask that the Administration delay the cost share requirement for the FY2020 preparedness grants.  Raising the federal cost share has been done after other major disasters, including Hurricane Sandy (2012), the flooding in Louisiana in (2016), and Hurricane Irma (2019). 

State and local officials continue to raise concerns with federal agencies regarding testing and insufficient personal protective equipment (PPE) for health care workers as well as local government emergency responders, including essential personnel like waste water treatment workers.  

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