Bipartisan legislation to help states, counties and municipalities offset the revenue losses caused by COVID-19 shelter-at-home decrees is being hammered out by Congress.
An estimated $500 billion in federal dollars will trickle down to Mississippi, Coahoama County, Clarksdale and ultimately those doing business with the city, county and state.
Senator Cindy Hyde-Smith (R-Miss.) is an original cosponsor of the State and Municipal Assistance for Recovery and Transition (SMART) Act. The measure would provide $500 billion targeted to state and local governments with flexibility to use the funds to help mitigate the need for significant layoffs, tax hikes and interruption of essential services.
This flexibility is also applied retroactively to the Coronavirus Relief Fund in the CARES Act. Divided into three funding tranches, or portions, funding would be distributed by formula based on population, COVID-19 infection rates, and revenue losses.
“I’ve heard from many Mississippi counties and communities about the financial hardships they’re experiencing as costs related to COVID-19 consume more of their budgets,” said Hyde Smith. “All our state and local leaders want to avoid layoffs, disrupting essential services or raising taxes.
“The fact that cities and counties face layoffs, reductions in essential services, and even bankruptcies is cause enough for us to look at responsible ways to ensure people have access to the services they need,” she added. “This bill represents a good-faith effort to help communities, counties, and states weather the financial hardships of the coronavirus emergency.”
The bill would provide greater flexibility for local governments to use the funding and help avoid requiring states to expand the size of state government and create new, unnecessary programs just to be able to spend emergency COVID assistance.
Funding would be allocated through three equally divided tranches, with each state receiving a minimum of $2 billion combined from the first two tranches in addition to their allocation from the third tranche.
In developing the legislation, Hyde-Smith also supported dropping proposed population thresholds that would limit the availability of SMART Act resources for small, rural towns and counties. Unlike the $150 billion Coronavirus Relief Fund in the CARES Act that included a 500,000-population threshold, the SMART Act would provide direct federal assistance to communities and counties, regardless of its size.