State and local governments lost 981,000 jobs in April and shed another 487,000 jobs in May.  The Bureau of Labor Statistics estimates that 85 percent of those job losses occurred in local governments where teachers, public safety, public works, and public health workers are employed. 

These losses are double the 720,000 jobs that were lost over several years after the Great Recession of 2008-2009.  Although the U.S. population has grown over the past 10 years, local and state government employment had only recently returned to the 2008 high of 19.7 million employees.

As the Senate debates the need for a fourth stimulus package, be sure to let your representatives know how the pandemic and economic downturn has affected your community. ICMA continues to work with the national associations of local and state governments (Big 7 Statement) to advocate for a robust package of direct aid to local and state governments to sustain vital services. 

President Signs Paycheck Protection Program Flexibility Act

President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA) on June 5 after the Senate unanimously passed the legislation.  The PPPFA provides more flexibility for small businesses to use the loan proceeds, extending the expense forgiveness period from eight weeks to 24 weeks.  It also reduces the payroll ratio requirement from 75 percent down to 60 percent and gives borrowers up to five years to repay the loan without penalty if their loan is not forgiven.  It extends the June 30 rehiring deadline to December 31, 2020.

Treasury Issues Updated Coronavirus Relief Fund FAQs

The U.S. Treasury published an update to the Coronavirus Relief Fund’s (CRF) Frequently Asked Questions (FAQ) on May 28, including these changes:

  • A clarification that states should transfer funds to local governments that were not eligible for direct payments and an example on how the state could distribute the funding,
  • A brief statement emphasizing that CRF payments cannot be used for lost revenue such as unpaid utility fees, but can be used as a subsidy payment for households experiencing economic hardship.
  • Additional guidance to CRF recipients that payments received are subject to the Single Audit Act and other provisions of the Uniform Guidance.