Knowledge and Insights

On Monday, May 10^th, 2021, the U.S. Department of the Treasury announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for eligible state, local, territorial, and Tribal governments. The Treasury also released details on how these funds can be used to respond to pandemic response needs, provide aid for revenue shortfalls among these governments, and support the communities hit hardest by the COVID-19 crisis. With the launch of the Coronavirus State and Local Fiscal Recovery Funds, eligible jurisdictions will now be able to access these funds to address the needs outlined above.

The Treasury has set this much-needed relief in motion to:

• Provide urgent COVID-19 response efforts to help decrease spread of the virus and get the pandemic under control.
• Replenish lost public sector revenue to strengthen aid for vital public services and help retain jobs.
• Establish immediate economic stabilization for households and businesses.
• Overcome the systemic public health and economic challenges that have contributed to the unequal impact of the pandemic on certain populations and demographics.
• Deliver resources for investments in building, maintaining, or upgrading water, sewer and broadband infrastructures.

Funding Amounts

The American Rescue Plan gives a total of $350 billion toward the Coronavirus State and Local Fiscal Recovery Funds to help eligible state, local, territorial, and Tribal governments meet their present needs and build the foundation for a strong recovery. Congress has allocated this funding to tens of thousands of jurisdictions. These allocations include:

Local governments should expect to receive funds in two tranches, with 50% provided beginning in May 2021 and the balance delivered 12 months later. States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the latest available data as of the date of certification will receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches. Governments of U.S. territories will receive a single payment. Tribal governments will receive two payments, with the first payment available in May and the second payment, based on employment data, to be delivered in June 2021.

Eligible state, territorial, metropolitan city, county, and Tribal governments may now request Coronavirus State and Local Fiscal Recovery Funds through the Treasury Submission Portal.

The government entities mentioned above can benefit significantly from working with expert advisors in this area. Mercadien has an established track record partnering with state and local governments to effectively distribute federal funds and ensure compliance.

Our goal is to streamline processes so that funding goes to those who need it most. We’re not here to detract from the invaluable work of government entities; rather we act as a trusted partner, offering insight and guidance so that everything progresses the right way.

If you have any questions regarding the Coronavirus State and Local Fiscal Recovery Funds and how they can impact or aid your organization, please contact us at [email protected].

Additional Source:

New Jersey Association of Counties Fact Sheet

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought. It is possible that if additional information from the SBA, Treasury Department and/or your lender is forthcoming, our observations and comments noted herein could be materially different.