Congressman Panetta Co-Introduces Bill to Help Local Governments Access COVID-19 Stabilization Funds

May 1, 2020
Press Release

SALINAS, CA – Today, Congressman Jimmy Panetta (D-Carmel Valley) co-introduced bipartisan legislation to allow local governments to utilize funding allocated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Flexibility for Localities and Eligibility Expansion Act of 2020, or FLEX Act, H.R. 6652, allows for additional flexibility for local governments to access funds previously provided to states and use the funding to offset lost revenue due to the COVID-19 health emergency. The lead sponsor of the bill is Congressman Don Bacon (R-NE).

Current CARES Act guidance prohibits the use of COVID-19 relief funds to offset local governments’ lost revenues, hampering their ability to respond to this crisis. The CARES Act allocated $150 billion for state, local, and tribal governments but requires these funds only be used to reimburse local governments for direct costs incurred from COVID-19 response actions. At the same time, stay-at-home orders and other public health measures have halted sales tax from economic activity and cut off state and local governments from one of their primary sources of revenue. As a result, cities and towns across America require an immediate infusion of cash to offset lost revenue in order to sustain essential services.

"The strategy against COVID-19 has been federally funded, state-mandated, and locally executed. Our local governments have been on the front lines executing critical public health and emergency services at a time when they are experiencing devastating drops in revenue. That’s why the federal government needs to continue playing its part by funding local governments of all sizes," said Congressman Panetta.  "The Flexibility for Localities and Eligibility Expansion (FLEX) Act of 2020 ensures that localities serving fewer than 500,000 people can access CARES Act funding provided by the federal government, and gives them the flexibility to use the funding to offset lost revenue."

"If we don’t address these shortfalls now, our local leaders will be standing on the brink of having to make decisions that would result in laying off police, firefighters, and other essential services. We cannot allow that to happen,"  said Congressman Bacon.  "The largest city in my district, the City of Omaha, was scheduled to host to the NCAA Men’s College World Series, U.S. Olympic Swim Trials, Berkshire Hathaway Stockholders Meeting, and other events that attract thousands of people into restaurants and bars, generating critical revenue. Without these events Omaha is estimated to lose nearly $35 million this year in tax revenue, negatively impacting the city’s operations including first responder departments."