The federal government has issued its Interim Final Rule regarding implementation of the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund (Fiscal Recovery Funds) established under the American Rescue Plan Act signed into law by President Biden on March 11, 2021.
The Fiscal Recovery Funds build upon previous federal government aid to state and local governments in the wake of the COVID-19 pandemic. As communities across South Carolina continue to address the wide-ranging impact of COVID-19, the Fiscal Recovery Funds provide state and local governments with great flexibility in determining how best to address community needs. The federal government will release the Fiscal Recovery Funds in two disbursements, with the first disbursement beginning in May 2021 and the final disbursement available one year later in 2022. The State of South Carolina is slated to receive an allocation of $2,499,067,328.50. And, as shown on the charts below, all 46 South Carolina counties and South Carolina “metropolitan cities,” as defined in the Housing and Community Development Act of 1974, will receive a direct allocation of Fiscal Recovery Funds:
|Fiscal Recovery Fund Allocations
by South Carolina Counties
|Fiscal Recovery Fund Allocations by South Carolina Metropolitan Cities and Towns|
|Hilton Head Island||$5,227,178|
|North Myrtle Beach||$1,954,643|
The above listed local governments must request disbursement through the federal government’s online portal available here. Other smaller South Carolina cities and towns, generally with populations of less than 50,000, will likewise receive an allocation from the Fiscal Recovery Funds. Current plans call for the federal government to release an additional $435,125,080 to the State of South Carolina for disbursement to the cities and towns. More information on those indirect allocations will be released later by the federal government and South Carolina state government. Read more about funding for smaller local governments here. The Interim Final Rule released by the U.S. Department of Treasury on May 10, 2021 provides that Fiscal Recovery Funds must be used:
- To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
- To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers;
- For the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency; and
- To make necessary investments in water, sewer, or broadband infrastructure.
In addition to the Interim Final Rule on the Fiscal Recovery Funds, the federal government has published answers to frequently asked questions, provided further guidance, and listed non-exclusive examples of how Fiscal Recovery Funds may be used. Importantly, the federal government has stipulated that use of Fiscal Recovery Funds is generally forward looking, with covered costs incurred beginning on March 3, 2021. The federal government has placed a significant importance on local reporting and publishing information on the use of Fiscal Recovery Funds in local communities and encourages local governments to engage their community partners and citizens in identifying a plan of action for the federal funds. What can eligible state and local governments do now?
- Review the Interim Final Rule on the Fiscal Recovery Funds here
- Review the Frequently Asked Questions publications to help with identifying local needs and eligible expenditures
- Review the federal Quick Reference Guide here
- Review the federal Fact Sheet here
- Identify projected revenue shortfalls that may affect ongoing government operations in the current or upcoming fiscal year
- Engage local communities, partners and citizens to develop a plan for the Fiscal Recovery Funds