House passes American Rescue Plan Act with $65 billion in direct and flexible funding for cities

Mar 10, 2021

The U.S. House of Representatives passed a landmark $1.9 trillion coronavirus relief bill, which includes $65 billion dollars for every city and town in the country. 

California cities are expected to receive more than $7 billion dollars in much needed assistance to help offset the billions of dollars in revenue shortfalls due to the shutdown of local economies and the billions spent protecting public health, delivering essential services, protecting vulnerable populations, and helping small businesses survive during the pandemic. 
H.R. 1319, the American Rescue Plan Act, now goes to President Biden for his signature, which is expected Friday. Cal Cities Executive Director and CEO Carolyn Coleman issued a statement in response to the historic vote earlier today.
The passage of this relief package follows nearly a year of calls by city officials, backed by prominent economists, urging Congress to deliver aid to local governments hit hard by the pandemic and struggling to protect their communities and continue the delivery of core services.
The Cal Cities-initiated Support Local Recovery coalition, a grassroots alliance of local government, labor, and business formed in May 2020 to put pressure on the state and federal governments to provide direct and flexible funding to cities to support essential services, including police, fire, public works, permitting, and planning.
Coalition members held news conferences, sent letters, made phone calls, and used social media to urge legislators and administration officials to ensure cities received the funding they needed to continue responding to the pandemic and lead in the recovery. Today, we can see how working together with a strong united voice helped us achieve a huge victory for our cities, our coalition partners, and for all those in our communities.
The relief package includes direct aid to small and midsize cities across the country – most of which were left out of previous bills. This means all of our cities, regardless of size, will finally get much-needed relief to fight the pandemic and help our local economies recover. The National League of Cities has a draft spreadsheet with calculations for every city, town, and village. The funding can be used for a variety of purposes, including revenue replacement. 

The American Rescue Plan provides federal investments to defeat the COVID-19 virus and provide workers and families with resources needed to survive the pandemic.

 Specifically, the bill provides funding for:
  • Agriculture and nutrition programs, including extending SNAP and the Pandemic EBT program to keep families fed through the pandemic;
  • Schools and institutions of higher education to safely reopen schools, address learning loss, and support students and staff, including support for broadband for students;
  • Child care to help sustain child care providers and expand child care assistance to 857,000 children;
  • COVID-19 vaccinations, testing, treatment, and prevention, especially for hard to reach communities and areas;
  • Mental health and substance-use disorder services;
  • Emergency rental assistance, homeowner assistance, and other housing programs to help families pay rent, mortgages, and utilities;
  • Transit agencies to prevent layoffs of transit workers and prevent severe cuts to transit services that essential workers and the general public rely on.
  • Payments to state, local, tribal, and territorial governments for economic relief and to combat the virus;
  • Small business assistance, including specific programs for restaurants and live venues;
  • Support for health care workers, transportation workers, federal employees, veterans, and other targeted populations;
  • International and humanitarian responses and;
  • Tribal government services.
The bill also includes provisions that:
  • Extend enhanced unemployment benefits through September, providing an additional $300 per week on top of all state unemployment benefits;
  • Provide direct economic impact payments of $1,400 per eligible individual and $2,800 for couples making up to $150,000 per year. Eligible families will also receive an additional $1,400 payment per child and adult dependent, amounting to $5,600 for an average family of four;
  • Expand the Child Tax Credit and the Earned Income Tax Credit, two powerful and effective tools to end poverty;
  • Provide premium assistance for certain health insurance coverage; and
  • Require coverage, without cost-sharing, of COVID-19 vaccines and treatment under Medicaid and the Children's Health Insurance Program (CHIP).
Once the bill becomes law, the implementation process to get this much needed funding to cities begins. The funding coming to cities will be administered by the U.S. Department of Treasury, which over the next few weeks will develop detailed rules and guidance regarding the eligible uses for the funds. In coordination with NLC, Cal Cities staff is in touch with the Treasury department to get answers to questions and emphasize the need to get funds to cities quickly.

As Cal Cities learns more, we will be sure to provide information to members through briefings, webinars, newsletters, and direct communication. Cal Cities will host an initial briefing for members with NLC representatives Tuesday, March 16, 1-2 p.m. Register now.