Issue Brief: California's Use of Federal Pandemic Aid
Report #260, May 2021
Ethan Rarick, Executive Director
Little Hoover Commission Outlines Critical Differences between the American Rescue Plan and the CARES Act
Critical differences between the CARES Act and American Rescue Plan warrant consideration as the state determines how to allocate its anticipated $26 billion in federal pandemic-related relief, the Little Hoover Commission explains in its latest Issue Brief.
The Brief outlines the state's use of the CARES Act money that was received in 2020 and highlights the potential differences between eligible uses of that funding and the expected American Rescue Plan funding the state will receive this year.
This is the Commission's third Issue Brief. The Commission's previous Issue Briefs have focused on California's digital divide and COVID's impact on California housing. Issue Briefs are the Commission's newest resource for state policymakers, and outline research without making policy recommendations.
"We have outlined some key contextual factors and eligibility requirements that state policymakers may wish to consider as they contemplate the use of the anticipated $26 billion dollars in American Rescue Plan funding," noted Commission Chair Pedro Nava.
In its Issue Brief, the Commission highlights some of the key differences between the CARES Act and the American Rescue Plan. These differences include:
A longer time frame to use funding.
The impact of additional federal coronavirus-related funding packages.
The amount of funding congressionally appropriated to local and tribal governments.
Budgetary shortfalls facing local governments, due to both increased program costs and reduce revenues.
Explicit allowance to transfer appropriated funds to separate entities, such as special districts and tribal organizations.
"We hope this Brief will serve as a resource for state policymakers as they weigh options for equitably distributing funding received under the American Rescue Plan to best serve all Californians," said Commission Vice Chair Sean Varner.
About the Little Hoover Commission
The Little Hoover Commission is America's only permanent, independent citizens commission working to improve state government. A nonpartisan oversight agency created in 1962, the Commission includes 13 Commissioners appointed by the Governor and legislative leaders. The Commission's mission is to investigate state operations and promote efficiency, economy, and improved service.
This Issue Brief outlines the state's use of the $9.5 billion in CARES Act money that was received last year, and highlights potential differences between eligible uses of that funding and the expected $26 billion American Rescue Plan funding the state will receive this year. The goal of this Brief is to provide policymakers with background on last year's use of federal relief, and on the potential uses of this year's relief.
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