Florida’s small municipalities await their cut from $1.275B in CARES Act money

By John Haughey
The Center Square
June 10, 2020

(The Center Square) – As Congress debates a proposed $3 trillion COVID-19 package that would include billions of dollars for state and local governments, smaller municipalities in Florida are wondering when – or if – they’ll receive a share of previous federal assistance allocations.

Congress approved $150 billion for state and local governments in March when it adopted the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act.

Florida received about $8.3 billion from the CARES Act for government assistance. Under the bill, 55 percent was reserved for the state, and 45 percent was reserved for direct payments to municipalities.

Of the $3.75 billion earmarked for counties and cities, more than $2.47 billion was distributed in direct payments from the U.S. Department of the Treasury to 12 counties with populations greater than 500,000.

But $1.275 billion has remained in state coffers for more than two months, and local officials representing the state’s other 400 municipal governments said they need the assistance to cover COVID-19 expenses and loss of revenues from emergency shutdowns.

In a letter sent last month to Gov. Ron DeSantis, the Florida Association of Counties (FAC) and the Florida League of Cities (FLC) requested “this $1.275 billion be earmarked to provide necessary resources to local governments that were not direct beneficiaries of CARES Act dollars.”

Under the FAC’s and FLC’s calculations, Florida municipalities that have not received CARES Act money would receive $590 million, counties would receive $430 million and $254 million would be set aside for “contingency purposes.”

According to the Small County Coalition of Florida, 39 mostly rural counties – including 29 already regarded as “fiscally constrained” before the COVID-19 emergency – now face severe budget shortfalls.

Senate Appropriations Committee Chairman Rob Bradley, R-Orange Park, said last week “everyone is understandably eager and anxious to spend” the federal funds.

“Unfortunately,” he added, “like other federal taxpayer dollars returning to our state, CARES Act funds come with significant strings attached.”

Bradley advised the 400 local governments to “document and submit” COVID-19 expenses to receive Federal Emergency Management Agency (FEMA) reimbursements, which would be separate claims from the $1.275 billion still awaiting state dispersal.

“I join with local governments who are seeking to be made whole financially and whose residents are counting down the days until we can fully return to the quality of life that has made our state the envy of the world,” Bradley said. “In my view, the situation is still evolving, and additional data and information is needed for state government to make responsible decisions regarding such significant levels of funding.”

The situation in Florida is not unique. According to an Associated Press review, only about a dozen states have allocated fully all of the federal assistance they received from the CARES Act.

The AP said the reasons for the delay in distributing the funds vary, with some governors holding onto it in hopes of receiving Congressional authority to spend it on plugging budget holes created by drops in tax revenues.

In some states, such as Florida, spending decisions await updated revenue forecasts. Early indications suggest funding for the state’s pending $92.3 budget will be $10 billion short.

It is uncertain whether DeSantis can veto spending in the budget to fill the gaps or whether the Legislature will need to convene in a special session to sort out the entire spending plan.

In May, the U.S. House approved an additional $3 trillion aid package, with nearly a third dedicated to state and local governments. Republicans, including Florida Sen. Rick Scott, said it’s too much, especially since some state have not spent CARES Act money.