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CARES Act Funding for Municipalities - Where's the Money Going?

The U.S. Department of the Treasury recently announced the distribution of $150 billion of CARES Act funding for municipalities. States and eligible units of local government will share $139 billion, the District of Columbia and five U.S. territories will share $3 billion, and the remainder will be shared among tribal governments.

On March 27th, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law - the largest ever economic aid and stimulus package in U.S. history. Within the $2.1 trillion package, $150 billion was allocated as a Coronavirus Relief Fund to support states, eligible units of local government, the District of Columbia, five U.S. Territories, and tribal governments. This is not to be confused with the Governor’s Emergency Education Relief Funding which extends into 2021. 

Related Blog: What Does a Public Engagement Plan Look Like Post-COVID?

The legislation stipulates no state should receive an amount of less than $1.25 billion of the $139 billion allocated to CARES Act funding for municipalities, and thereafter the funds should be distributed pro rata according to the population of each state. To comply with this stipulation, the Treasury Department created a formula in which each of the fifty states is allocated a baseline 1% share of the total population, and the remaining 50% of CARES Act funding for municipalities distributed pro rata:





























Rhode Island






South Carolina






South Dakota




























New Hampshire






New Jersey






New Mexico


West Virginia




New York






North Carolina






North Dakota





Eligible Units of Government Receive Their Shares Directly

The legislation also stipulated that any county, city, town, or other unit of local government with a population in excess of 500,000 could apply to the federal government for a direct payment. The amount of the direct payment is deducted from the state's allocation; and, in some cases, the direct payments make a significant difference to how much the state receives. For example:


Total Allocation


Less Direct Payments to Local Governments


Chicago City



Cook County



DuPage County



Kane County



Lake County



Will County


Payment to the State



After direct payments of CARES Act funding for municipalities have been deducted, states have to distribute no less than 45% of the remaining funding between counties, cities, and towns etc. with populations of less than 500,000 residents. The distribution of CARES Act funding for smaller municipalities does not have to be pro rata according to population size, but funds can only be used for previously unbudgeted expenses attributable to the COVID-19 public health emergency.

What Can CARES Act Funding for Municipalities be Spent On?

This is dependent on what expenses were previously budgeted for. For example, a state or local government can use the funds to pay payroll and benefit costs if public health employees, who would otherwise have been laid off or furloughed, are repurposed to mitigating or responding to the COVID-19 public health emergency. Other authorized uses of CARES Act funding for municipalities include:

  • Public health emergency recovery planning
  • Expenses associated with contract tracing
  • Grants to prevent homelessness due to eviction or foreclosure
  • Loans to businesses to cover COVID-19 response costs
  • Establishing a reserve of Personal Protective Equipment and increasing ICU capacity

Related Blog: What is Contact Tracing?

State and local governments are not required to submit spending plans to the Treasury Department before receiving CARES Act funding for municipalities, but the Inspector General of the Department of the Treasury will monitor how funds are spent. If the Inspector General finds a disbursement of funds violates the funding requirements, the amount of the disbursement has to be returned to the Treasury.

Unused Funding, Loan Repayments, and the Disposal of Assets

The Inspector General's scrutiny will not stop at how the funds are spent. State and local governments must disperse their share of the funding before December 30 or return what's left to the Treasury. Similarly, repayments of loans - if not reallocated for other projects prior to 31st December - must be paid to the Treasury, along with receipts from the disposal of assets purchased with CARES Act funding. Some states are opting to internally set a deadline for mid-November 2020 to ensure all of the paperwork is in order before the December 30 deadline.

Furthermore, all states and local governments in receipt of more than $750,000 are subject to the audit requirements of 2 CFR § 200.501 to enforce accountability for how and under what circumstances the funds are used. This is to ensure the CARES Act funding for municipalities is used to react to, respond to, and recover from the COVID-19 public health emergency - and not to support general budget shortfalls.

Consider Leveraging Funding for Multi-Purpose Solutions 

It's important for state and local governments to consider leveraging the CARES Act Funding for public safety technologies that serve multiple purposes. We’ve broken down the millions of state funding for COVID-19 related expenses above, and it’s important to understand what solutions could be utilized in both coronavirus response and recovery. A mass communication and collaboration platform is a solution worth considering, as it’s capabilities reach further than just simple mass communications. 

Although communicating effectively with the public about COVID-19 is extremely important, a mass notification solution can also assist with health monitoring and checks through automated geo-polling, shift management to help with filling empty shifts when government employees are ill, identifying high-risk and vulnerable community members who may need additional assistance, as well as sending targeted messaging to facilitate isolation for those who have tested positive for the virus.

To safely reopen economies and support state and local communities, leveraging CARES Act Funding to invest in multi-faceted public safety communication technology could be extremely helpful in recovering from the COVID-19 pandemic.

Universal - State and Local Coronavirus Recovery Solution

Tara Gibson
Tara Gibson

Tara is a Marketing Coordinator on the Rave Mobile Safety marketing team. She loves writing about all things K-12, State & Local, Higher Ed, Corporate, and Healthcare, and manages the Rave social media channels. When she's not working, she's taking care of her smiley, shoe eating, Instagram-famous fur baby, Enzo!

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