HARTFORD, CT — Connecticut cities and towns will be eligible for up to $75 million in funding for COVID-related expenses.
Municipal governments have been waiting for information from Gov. Ned Lamont’s administration about how much they might be able to receive from the state, which received $1.4 billion under the Coronavirus Aid, Relief, and Economic Security or CARES Act.
The Connecticut Coronavirus Relief Fund unveiled by the Lamont administration Thursday is about $35 million more than cities and towns say they currently need to cover their initial expenses.
Office of Policy and Management Secretary Melissa McCaw said they reached out to municipalities to inquire about their estimated costs and at the moment, the tally stands at $40 million.
McCaw said they can match the state’s FEMA reimbursement with Coronavirus Relief Fund money, whether it’s for shelter-related expenses, PPE-related costs, or other supplies. The federal government will reimburse those costs at 75% and the Coronavirus Relief Fund that Gov. Ned Lamont has authorized will be able to match those dollars at 25%.
“Just to be clear, to use these funds they have to be direct COVID-related expenses,” McCaw said. “They do not cover any lost government revenue.”
Betsy Gara, executive director of the Connecticut Council of Small Towns (COST), said as cities and towns begin to reopen the costs are beginning to pile up.
“There is a great deal of uncertainty regarding how COVID-19 will affect property tax revenues,” Gara said. “As a result, many towns are worried about how they are going to fund critical local services. Some towns are even resorting to issuing Tax Anticipation Notes in case they face cash flow issues.”
None of the federal funds are allowed to be used to offset any loss in tax revenues.
“Fortunately, the release of federal funding to offset COVID-19 costs will take some of the financial pressure of our towns and cities,” Gara said. “The federal funding will also help position our communities for social and economic recovery.”
The Connecticut Conference of Municipalities said they appreciate the funding announcement, but they questioned how the state came up with the dollar amount.
Federal government guidelines to the states recommended that about 45% of the grant be spent on municipalities with populations less than 500,000. That would amount to roughly $630 million out of Connecticut’s 1.4 billion allocation.
McCaw said she thought the funding was adequate and the state is “leaving itself with some flexibility for surprises.”
McCaw said the state is not going to pay for municipal expenses that haven’t been incurred. She said what may seem like a smaller allocation to municipalities really isn’t because the state has already stepped up and picked up many costs, such as paying for testing or moving people out of shelters.
“What you’re seeing here is what looks like a smaller allocation to municipalities because the state is directly bearing a lot of the expenses,” McCaw said.
McCaw said both Democratic and Republican legislative leadership were pleased with the proposal.
The state is already running a more than $600 million deficit this year and is expected to run an estimated $2.4 billion deficit next fiscal year.