Manchin Bill Provides Dedicated Relief To West Virginia Local Governments
SMART Act provides $500B in robust, flexible federal funding for every state, county, municipality in the United States
Washington, DC – U.S. Senator Joe Manchin (D-WV) introduced bipartisan legislation to deliver critical, federal resources to states and communities on the frontlines of the COVID-19 fight. The State and Municipal Assistance for Recovery and Transition (SMART) Act targets $500 billion in emergency funding to every state, county and community in the country, while prioritizing assistance to the areas with the greatest need. Unlike previously allocated emergency funding, the SMART Act includes flexible, dedicated funding to local governments to ensure it is distributed fairly and efficiently. After Senator Manchin weighed in with Senators Menendez and Cassidy, they removed the population threshold for direct federal assistance, ensuring that all counties and municipalities in West Virginia would receive a portion of these funds.
The SMART Fund answers the bipartisan call for help from our nation’s governors by providing $500 billion in flexible funding to states to help cover rising costs to combat COVID-19 and lost revenues due to the economic fallout. Without this federal assistance, governors, mayors and county leaders have warned of deep cuts to essential services and layoffs of police, firefighters, paramedics, teachers, sanitation, public health and public works employees, and other frontline workers. These funds can be used to help state and local governments meet the current demand, expand testing capacity and contact tracing, provide further assistance to residents, local hospitals, small businesses and schools, in addition to maintaining critical services residents depend upon.
“West Virginia’s cities and municipalities are facing drastic cuts in revenues as a result of the COVID-19 pandemic. If Congress doesn’t act now, our local officials will be forced to make difficult choices between providing essential services like first responders and retaining their employees to balance their budgets and avoid bankruptcy. It is unacceptable to allow our small businesses or our local governments to face bankruptcy for doing the right thing during this crisis,” said Senator Manchin. “This bipartisan legislation will ensure our state and local governments can keep essential services up and running during this pandemic. I continue to hear from my friends in city and country government that the need for additional support is urgent and this bill delivers $500 billion in additional support so they are able to continue operating through this difficult time.”
“The County Commissioners’ Association of West Virginia (CCAWV) and the West Virginia Association of Counties (WVACo) have appreciated Senator Manchin’s immediate help to our counties in getting us needed pandemic funding relief, and he offers one more example as a champion for bipartisan solutions,” said Jennifer Piercy, Executive Director of the CCAWV and Jonathan Adler, Executive Director of the WVACo.
“The West Virginia Municipal League (WVML) welcomes the introduction of the Smart Act, a bipartisan approach to assist local governments with maintaining essential services. And we’re excited that Senator Manchin has provided support to the legislation,” said Travis L. Blosser, Executive Director of the WVML.
“Sheriffs in West Virginia see the importance of offsetting budget shortfalls and making sure we are capable to continue to be on the front lines during this time, providing essential services in the face of COVID-19. Sheriffs can’t afford to lay off law enforcement nor tax deputies, which keep our citizens safe and our government funding stream in place. We also understand that citizens simply cannot be strapped with any type of tax increases, especially in a world struggling to have a job and support their families. The SMART Act will help West Virginians,” said Rodney Miller, Executive Director of the West Virginia Sheriffs’ Association.
The SMART Fund builds upon the $150 billion set aside in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help state and local governments. It eliminates the current 500,000 population threshold, allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance, regardless of its size. Additionally, the SMART Fund targets funding to areas of greatest need based upon infection rates and revenue losses, and overturns the U.S. Treasury’s erroneous guidance that placed undue restrictions on how state and local governments could use the CARES stabilization funding.
Specifically, the SMART Fund would provide $500 billion to state, local, and tribal governments in order to avoid mass layoffs, steep tax hikes, and a breakdown of essential services. After a $16 billion set-aside for Native American tribal governments, the remaining funding would be allocated to states through three equally divided tranches:
1) One-Third Based on Population Size. This tranche of funding will be allocated to all 50 states, D.C. and U.S. territories in proportion to each respective state or territory’s percentage of the U.S. population. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
2) One-Third Based on Infection Rates. This tranche of funding will be allocated based on each state’s relative share of the nation’s infection rate. States that have disproportionately high infection rates will incur significantly higher expenses and will likely need to continue stay-at-home orders for longer periods of time, leading to larger revenue losses. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
3) One-Third Based on Revenue Losses. This tranche of funding will be allocated based on each state’s revenue loss in proportion to the combined revenue loss of all the states from January 1, 2020 through December 31, 2020. States that took strong actions to curb the spread of the coronavirus should not face additional budget shortfalls as a result of taking responsible action. Counties and municipalities will each get a share of one-sixth of their state’s allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s revenue loss from January 1, 2020 to December 31, 2020 in proportion to the combined revenue loss for all counties and municipalities in the state over this period. This is designed to ensure that adequate funding flows to counties and municipalities that are disproportionately affected relative to their population.
Under the formula, for example, if a state is awarded $6 billion in SMART funds, $4 billion would go to help stabilize the state government, $1 billion would be split among its counties and the remaining $1 billion dispersed to each of its municipalities based upon the respective criteria in each tranche.
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