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Counties push Democrats for more generous slice of virus aid

Stakeholder group says Democratic leaders’ pitch for $150 billion in additional aid to states and localities would give too much to cities

Democratic leaders should change the funding distribution for local governments in their latest COVID-19 aid package, according to the National Association of Counties.

The organization wrote to top lawmakers on Monday asking for the legislation to send money directly to counties, rather than allocating funds through the Department of Housing and Urban Development’s Community Development Block Grants formula.

“The CDBG formula was not designed to allocate funds in a public health emergency,” National Association of Counties President Mary Ann Borgeson wrote to House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer. “While we agree that the HUD CDBG framework is among one of the best, most efficient ways to award federal aid directly and as a pass-through to local governments, the traditional formula is based on low-to-moderate housing and community development conditions.”

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Democrats proposed a bill last week that would have provided an additional $150 billion to state and local governments to help them address the pandemic. The money would be provided along with more money for hospitals and low-income food assistance as part of Democrats’ counteroffer to Republicans seeking more small-business lending funds.

Of the $150 billion, $65.45 billion would be provided to state governments based on population, with another $20 billion allocated to states based on their share of the national COVID-19 infection rate. Another $11 billion would go to territories and tribes, and $53.55 billion would be distributed to local governments.

Under the block grants formula for the local government share, 70 percent of the $53.55 billion would go to “entitlement areas.” Those are defined as cities with more than 50,000 residents or urban counties with more than 200,000 people, not counting eligible cities.

The remaining 30 percent would go to local governments that don’t meet that criteria, according to a summary from Schumer’s office.

In practice, the HUD funding formula would mean that Cook County, Illinois, for example, would receive $1.1 billion less than the city of Chicago located within the county. That works out to about $3.3 million per 100,000 Cook County residents, while Chicago would get $46.3 million, according to a National Association of Counties analysis included with the group’s letter.

By the same token, Los Angeles County would get about $490 million less than the city of Los Angeles, or $3.6 million per 100,000 county residents vs. $21.5 million per 100,000 in the city residents.

Borgeson wrote to congressional leaders that many states have mandated that county governments implement emergency response and public health responsibilities, which have already cost counties billions of dollars.

The National Association of Counties estimates that county governments operate 903 hospitals around the country, 824 long-term care facilities and more than 1,900 public health departments.

Borgeson wrote that Congress should “develop a more balanced allocation method that takes into consideration both the skyrocketing costs and declining revenues for America’s county governments.”

She also called on Democratic congressional leaders to boost the total amount of additional funding for local governments in the next bill by $100 billion more than they’ve already suggested, for a total of $250 billion.

The Treasury Department on Monday began releasing the first $71 billion tranche of $150 billion in state and local aid provided in the massive aid package enacted last month. The money is being distributed to 171 local jurisdictions, including counties, cities and towns, with a population exceeding 500,000.

According to Treasury guidance, the agency is letting counties count the populations of metropolitan areas within their borders toward the 500,000 threshold. A National Association of Counties spokesman said the group was still reviewing the newly issued guidelines.

The counties’ letter Monday was also addressed to GOP leaders, who for now oppose additional state and local aid since the first round provided a little more than two weeks ago is just starting to flow.

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