On Friday, March 12, 2021 the latest COVID relief packaging, titled the American Rescue Plan, was signed into law. Included in the massive $1.9 trillion package is $350 billion in aid for state, local, and tribal governments. Of the $350 billion, Ohio has been allocated $11.24 billion and is seventh overall in terms of total allocated funding. The funding will be split between the state, county, and municipal governments. Some of the largest recipients include Franklin County, which is allocated over $255 million, Cuyahoga County with over $239 million, and Hamilton County with over $158 million. The City of Cleveland has been allocated over $541 million, Cincinnati has been allocated over $291 million, and Columbus has been allocated over $185 million.
Despite the size of the distributions, congress has attached restrictions to how the funds may be spent by local governments. First, the aid may be used broadly to provide relief for COVID-19-related impacts, including assistance households, essential workers, small businesses and nonprofits, and hard-hit industries like tourism and hospitality. Local governments may also use the funds to replace revenue lost during the COVID-19 crisis, make certain infrastructure investments, or provide premium pay to eligible workers that are performing essential work. Critically, however, the funding cannot be used to offset the cost of tax cuts. Funds can be recouped by the federal government if they are not spent in compliance with parameters set forth in the American Rescue Plan. The US Treasury is expected to release detailed guidance in the near future on the lawful uses of the relief funds.
The money will be distributed in two separate tranches. The first will be sent 60 days after the passage of the law, and the second within 12-months of the first tranche. The funding may have an impact on collective bargaining in the near future. Government entities and employers receiving funding need to carefully review the eligible uses of the money once treasury guidance is issued to ensure compliance with the law and prepare for upcoming union negotiations.
The attorneys at Fishel Downey Albrecht & Riepenhoff, LLP regularly assist cities and counties with federal and state law passed in response to the COVID-19 pandemic. If you have any questions about this or any other matter, please contact us at info@fisheldowney.com or call 614-221-1216.