Rep. Tom Reed (R-Corning)
WASHINGTON – Congressman Tom Reed (R-Corning, NY 23) is supporting a separate COVID-19 phase 4 stimulus bill in the House known as that he says would distribute $500 billion in federal aid to state and local governments.
The State and Municipal Aid for Recovery and Transition (SMART) Act Fund will enhance the $150 billion Congress provided to assist state and local governments in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, adding an additional $500 billion in funding. The additional federal support answers the call of the country’s governors, county officials, and local mayors who have been working around the clock to address the public health and the economic threat of COVID-19. It eliminates the current 500,000 resident population threshold, allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance, regardless of its size.
Reed said during his weekly media conference call that the SMART Act is a counter to the recently approved HEROES Act in the House of Representatives. Reed said the HEROES Act, which was approved despite his vote against it, will likely be going no where in the Senate.
“The HEROES Act is really not going anywhere. It is not a bill that is going to be processed any further than that House vote that was done for partisan reasons,” Reed said. “What the SMART fund is about is taking the issue of state and local aid – that has been an issue we’ve been working on for the last 60 days – in regards to making sure that our local governments, especially those smaller than 500,000 people in population, receive direct assistance from the Federal Government. On top of that, recognizing the states have suffered significant economic impact so providing additional recovery dollars there.”
Reed said the bipartisan SMART act legislation is the result work by lawmakers in both parties, and in both chambers of Congress, to deliver essential financial relief to the localities devastated by COVID-19.
Reed said as part of the process to finalize the bill, he called for inclusion of a “maintenance of effort” clause that he says will ensure localities continue to receive the full economic assistance they deserve.
Specifically, the SMART Fund would provide $500 billion to state, local, and tribal governments in order to avoid mass layoffs, steep tax hikes, and a breakdown of essential services. After a $16 billion set-aside for Native American tribal governments, the remaining funding would be allocated to states through three equally divided tranches:
- One-Third Based on Population Size. This tranche of funding will be allocated to all 50 states, D.C. and U.S. territories in proportion to each respective state or territory’s percentage of the U.S. population. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
- One-Third Based on Infection Rates. This tranche of funding will be allocated based on each state’s relative share of the nation’s infection rate. States that have disproportionately high infection rates will incur significantly higher expenses and will likely need to continue stay-at-home orders for longer periods of time, leading to larger revenue losses. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
- One-Third Based on Revenue Losses. This tranche of funding will be allocated based on each state’s revenue loss in proportion to the combined revenue loss of all the states from January 1, 2020 through December 31, 2020. States that took strong actions to curb the spread of the coronavirus should not face additional budget shortfalls as a result of taking responsible action. Counties and municipalities will each get a share of one-sixth of their state’s allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s revenue loss from January 1, 2020 to December 31, 2020 in proportion to the combined revenue loss for all counties and municipalities in the state over this period. This is designed to ensure that adequate funding flows to counties and municipalities that are disproportionately affected relative to their population.
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