What we know about the new federal COVID relief package

In addition to $350 billion in aid to states and local governments, the legislation includes $1,400 direct payments to individuals, funding for vaccines and testing, unemployment assistance, enhanced tax credits for families and workers, money for public schools, and more. 

States, along with the District of Columbia, will receive $195.3 billion. Local governments will receive $130.2 billion, split evenly between municipalities and counties, resulting in a direct allocation of $65.1 billion to counties. 

State Budget Director John Hicks told legislators this week that he expects the state of Kentucky to get a direct allocation of approximately $2.4 billion.

Direct aid to Kentucky counties

How much will my county receive?

Excluding Jefferson County, Kentucky counties will receive an estimated direct allocation of approximately $717 million. The amount each county will receive is based on population. You can see an estimated allocation for your county below.

The U.S. Department of Treasury will oversee and administer these payments.

When will my county receive funding?

The allocation will be distributed directly to counties in two parts:

• 50 percent this year. The legislation specifies that the first payment go out within 60 days of enactment. 
• 50 percent no earlier than one year after the first payment.

The deadline to spend funds is December 31, 2024.

Note that this is not a grant program. The allocation will be distributed directly up front from the U.S. Department of Treasury to the county. Counties will be responsible for managing the distribution and spending the funds on allowable expenses. Your county will be required to provide periodic reports with a detailed accounting of the use of funds to the Treasury Department. If your county does not comply with any provision of this bill, it will be required to repay the U.S. Treasury an equal amount to the funds used in violation. 

KACo will provide additional information on reporting requirements as those details become available. 

How can the funding be spent?

As with the 2020 CARES Act funding, the U.S. Department of Treasury will be issuing more detailed guidance on how these funds can be used. As soon as the guidance is issued, we will distribute additional analysis. However, the bill outlines that funds may be used by counties to:

1. Respond to the public health emergency with respect to COVID-19 or its negative economic impacts.
   • This could include, but is not limited to: assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality.
2. Respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible county workers that are performing essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.
   • Premium pay is defined as an additional amount up to $13 per hour that is paid to an eligible worker for work during the COVID-19 pandemic. The bill imposes a cap of $25,000 for any single eligible worker.
3. For the provision of government services to the extent of the reduction in revenue (for example, property, occupational license or insurance premium tax revenue) due to COVID, relative to revenues collected in the most recent full fiscal year of the county prior to the emergency (for example, FY 2019).
4. Make necessary investments in water, sewer, or broadband infrastructure.

The National Association of Counties has developed county-level estimates for allocations, which you can find below. Note that these estimates are not official values from the U.S. Treasury and are subject to change. You can see more of NACo’s analysis of the legislation here.

KACo is following this new law closely and will publish more details as they become available.

Estimates of county-level allocations from the American Rescue Plan Act of 2021

*City/county consolidations are eligible to receive funds from both the county $65.1 billion and the city $65.1 billion allocation. City allocation estimates produced by the Congressional Research Services.