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The U.S. Treasury Department Monday launched state and local fiscal recovery funds totaling USD350 billion in relief, with the thousands of eligible jurisdictions able to tap the funds in coming days.
With cash provided from Biden's USD1.9 trillion relief package, Treasury said local governments should expect to receive funds in two tranches, with 50% provided beginning this month and the balance delivered 12 months later. States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the latest data will receive their full allocation of funds in a single payment. Other states will receive funds in two equal tranches. U.S. territories will receive a single payment and tribal governments will receive two payments, with the first payment available this month and the second payment to be delivered in June.
State and local governments across America have cut over 1 million jobs since the beginning of the crisis, and administration officials say the effort to replace lost public sector revenue strengthens vital public services and helps retain jobs, supports health expenditures, provides premium pay for essential workers, and invests in water, sewer, and broadband infrastructure.
"With this funding, communities hit hard by COVID-19 will able to return to a semblance of normalcy; they'll be able to rehire teachers, firefighters and other essential workers – and to help small businesses reopen safely," said Secretary Janet Yellen, in a statement.
Senior administration officials said states and territories may not use the funding to directly or indirectly offset a reduction in net tax revenue, and recipients may not use the funding to make a deposit to pension funds.
|Type||Amount in USD billions|
|States & District of Columbia||195.3|
|Non-Entitlement Units of Local Government||19.5|
Source: U.S. Treasury Department