Tax Policy – State and Local Funding Totals Under the CARES Act
State and local governments across the country split $150 billion in federal aid under a provision of the Coronavirus Aid, Relief and Economic Security (CARES) Act, passed on March 30th. The division of these dollars, made available through the new Coronavirus Relief Fund, has generated significant confusion. Here, we explain how the money is allocated, and provide a table showing the amount available for each state and eligible county across the country.
Allocation is by population, except that $3 billion is reserved for U.S. territories and the District of Columbia, $8 billion is set aside for tribal governments, and each state is guaranteed at least $1.25 billion even if its population share would otherwise indicate a lesser amount.
Local governments with populations of 500,000 or more are also eligible for aid, a provision responsible for much of the confusion. Localities are permitted to claim 45 percent of the amount allocated for their population, while the state retains the other 55 percent as it also serves that population. The state also retains 100 percent of the amount allocated to populations not within a locality of 500,000 or more.
To see how this works, consider the example of Ohio:
- Total state and local share under the CARES Act: $4.53 billion
- State population: 11.69 million
- 4.44 million people live within the 5 eligible counties of 500,000+ people
- $1.72 billion is associated with that share of the population
- These counties can claim 45 percent, or $775 million, of this total
- The state retains the remaining 55 percent associated with this population ($946 million)
- 7.25 million residents live outside an eligible locality
- $2.81 billion is associated with this share of the population
- That entire amount goes to state government
- In total, the state government is eligible for about $3.76 billion and local governments get $775 million
The diagram below illustrates this concept. Note how state and eligible local governments split the funding associated with their populations, while the state retains all money associated with the share of the state’s population that lives outside an eligible jurisdiction.
Notably, the language of the CARES Act mentions counties, cities, and other local governing bodies—and, with a few exceptions, cities are situated within counties, meaning that in many cases there are overlapping eligible populations. The city of Columbus, Ohio, for instance, is the county seat of Cuyahoga County, and both have populations in excess of 500,000.
It is not clear how the U.S. Treasury Department will handle such overlapping populations. One plausible interpretation is that the city can claim the share associated with its population and the county may claim the share associated with county residents outside the city. Treasury could also allow these jurisdictions to share the revenue in other ways. What is reasonably clear, however, is that they may not double up: Cuyahoga County and all its subdivisions are entitled to a total of $216 million, however it may be divided between the city and county.
The following table shows how much is allocated to each state overall (state and local government combined), plus how that aid is broken out—the state share and the share for each eligible county or county equivalent (including independent cities). As with the example above, in some cases, cities within these counties may share in the amount indicated for the county.
This table uses the latest available population data, circa July 2019. It is possible that the Treasury Department will use different figures. The greatest possible effect of using a different population dataset would be the inclusion or exclusion of jurisdictions just on the cusp of the 500,000-person threshold. As of July 2019, for instance, Sonoma County, California had a population of 494,336, and Morris County, New Jersey had a population of 491,845. If either of these counties, or others that are in similar positions, were to exceed the 500,000 threshold under the count employed by the Treasury Department, local distributions would diverge slightly from the amounts indicated below.
|Contra Costa County||$201,293,497|
|Los Angeles County||$1,751,852,108|
|San Bernardino County||$380,430,899|
|San Diego County||$582,547,875|
|San Francisco County||$153,832,754|
|San Joaquin County||$132,996,947|
|San Mateo County||$133,769,122|
|Santa Clara County||$336,415,539|
|El Paso County||$125,712,328|
|New Haven County||$149,157,475|
|New Castle County||$322,766,669|
|Palm Beach County||$261,190,530|
|Anne Arundel County||$101,077,945|
|Prince George’s County||$158,680,092|
|St. Louis County||$173,491,539|
|New Hampshire||Total Allocation||$1,250,000,000|
|New Jersey||Total Allocation||$3,444,370,826|
|New Mexico||Total Allocation||$1,250,000,000|
|New York||Total Allocation||$7,543,778,952|
|New York County||$284,213,729|
|North Carolina||Total Allocation||$4,067,110,763|
|North Dakota||Total Allocation||$1,250,000,000|
|Rhode Island||Total Allocation||$1,250,000,000|
|South Carolina||Total Allocation||$1,996,588,712|
|South Dakota||Total Allocation||$1,250,000,000|
|El Paso County||$146,449,366|
|Fort Bend County||$141,641,815|
|Salt Lake County||$202,499,486|
|West Virginia||Total Allocation||$1,250,000,000|
Sources: CARES Act; U.S. Census Bureau; author’s calculations.
Errata: Due to a WordPress glitch with bullet points, this document was originally published omitting the first digit of Ohio’s population figures.
Source: Tax Policy – State and Local Funding Totals Under the CARES Act