WASHINGTON — The U.S. Treasury will start pumping $350 billion in relief funds to state and local governments with the first payments beginning in a matter of days, senior administration officials said.
On Monday, the treasury opened its portal for states, territories, counties and city governments to request their aid from the American Rescue Plan. Small towns will receive their funds from state government.
New York will receive $12.7 billion, while Albany County will receive $59.3 million and the city of Albany will get $80.7 million.
Although governments have previously been awarded pandemic relief, this round will mark the first time that all cities and towns will be eligible for money.
"Since COVID-19 hit, the need for services provided by state, local, territorial and tribal governments have increased dramatically, including setting up emergency medical facilities, standing up vaccination sites and supporting struggling small businesses," said Deputy Treasury Secretary Wally Adeyemo. "At the same time, these governments have faced significant revenue shortfalls because of economic fall-out from this crisis."
Governments can use the money to pay for public health expenses, address negative economic impacts from the pandemic on workers, businesses and the public sector, replace lost revenue, provide premium pay to essential workers and also use it to improve water, sewer and broadband infrastructure, the treasury said.
Governments cannot use the money to directly or indirectly reduce taxes before all the money is spent. They also cannot use the money to make a deposit into a pension fund.
Local governments should expect to receive funds in two parts with half provided beginning this month and the balance in a year. 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. As of Monday, New York’s unemployment data indicates it will be eligible to get its full $12.7 billion this month, a Treasury memo shows.
The state Division of Budget declined say when it will request its funds or whether it expected to qualify for one lump sum payment.
"We are reviewing the guidance," said Freeman Klopott, a spokesman for the state Division of Budget.
Gov. Andrew M. Cuomo's budget for fiscal year 2022 will spend $5.5 billion of the $12.7 billion that the state is slated to receive. The state will spend the remaining funds over the next four years.
Albany County said it will be reaching out to the treasury in the next few days regarding the funds. The county is still calculating its revenue losses as well as increased pandemic expenditures before considering any other projects.
“This is a necessary step in rebuilding our economy after the pandemic," Albany County Executive Daniel McCoy said. "Thank you to our federal delegation and everyone who recognized that counties needed this funding, not only to survive but to prevent the significant revenue losses we suffered from becoming an additional burden to our local taxpayers.”
The federal government will distribute $195 billion to states, $65 billion to counties, $45.6 billion to cities, $20 billion to towns and local government agencies, $20 billion to tribes and other sovereign entities, and $4.5 billion to territories.
Republicans have opposed providing so much government aid to states and local governments, calling it a "blue state bail-out" when they were negotiating COVID-19 relief this winter.
"With the Treasury Department’s announcement today, we can say: help is on the way," said Senate Majority Leader Charles E. Schumer. “The Treasury Department’s flexible guidance is just what is needed to help get states and municipalities the resources and funding they need to prevent layoffs, to keep essential services running, and to keep our Main Streets alive and able to rebound as we increase vaccinations and emerge from the pandemic."
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