Peters Announces Proposal to Deliver Relief Funding to Local Governments Responding to and Recovering from Coronavirus Pandemic

Peters Concerned About Financial Challenges Facing Communities that Could Lead to Cuts in Critical Services, Layoffs of Public Health Care Workers, Firefighters, Law Enforcement, Teachers

WASHINGTON, DC – U.S. Senator Gary Peters (MI), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today announced legislation to provide local governments with direct federal relief that can be used to pay for essential services and offset lost revenues and increased costs from the COVID-19 pandemic. This continues Peters’ efforts to advance relief for communities across Michigan as part of the next Coronavirus relief package. The Direct Support for Communities Act would provide critical relief for local communities facing dire financial challenges in the midst of this crisis. Concerned about the layoffs of public health care workers, firefighters, law enforcement, teachers and other vital public servants across the country and financial challenges for Michigan communities, Peters is fighting to ensure that all counties, cities, towns and villages — regardless of size — have the financial resources necessary to continue to provide vital services. This direct relief also would help local governments avoid local tax and fee increases that would put more of a burden on already cash-strapped families and businesses in this crisis.

“The Coronavirus pandemic has upended everyone’s lives. State and local governments in Michigan have been leading the response to this crisis on-the-ground, but they need immediate support to carry out essential responsibilities,” said Senator Peters. “This bill would ensure cash-strapped communities can continue vital functions, including public safety and emergency services. Michiganders deserve action and I’m proud to announce this plan to ensure Michigan has the resources needed to get through this pandemic.”

Under this legislation, the local relief fund would be split 50/50, with half committed to cities, towns and villages and half committed to counties.

  • Of the portion allocated for cities, towns and villages, 70% would go to Community Development Block Grant (CDBG) entitlement communities using the CDBG formula developed by the Department of Housing and Urban Development (HUD).
  • The remaining 30% for cities, towns and villages would be sent to states, which would then be required to allocate the entire amount within 30 days to all non-entitlement communities in the state based on population.
  • The portion of emergency fiscal assistance for counties would be allocated across all counties based on population. The exception to that formula is that a current CDBG entitlement county would receive its amount if it is higher than what the county would receive under an allocation based on population.

Local governments would be able to use this federal relief to help address costs associated with lost revenues and response to the pandemic, in an effort to help avoid cuts to essential services and local tax and fee increases. This proposed formula for local fiscal relief is intended to be incorporated into a larger legislative package that would also include fiscal relief for state and tribal governments; retroactive availability to use the Coronavirus Relief Fund in the CARES Act for lost revenues; and other important measures.

As Michigan has been hit particularly hard by this pandemic, Peters has continued focusing on efforts to ensure the state and local communities across Michigan receive the support they deserve. After advocating for more relief to states and local governments, Peters reiterated this call following Leader McConnell’s comments that states should be allowed to declare bankruptcy.

Peters also recently called on Congressional leaders to provide additional resources to state and local governments seeking to upgrade their outdated technology as they face challenges processing increased unemployment claims, small business loans and other emergency assistance during the Coronavirus pandemic.