Congressman Doug LaMalfa, joined by the California Republican delegation in the U.S. House of Representatives, sent a letter to California Governor Gavin Newsom requesting he immediately release federal funding from the Coronavirus Relief Fund created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According the local health officials, Newsom has threatened to withhold this funding from several counties if they refused to comply with state shutdown mandates. According to a release from LaMalfa, California received $15.3 billion in funds from the Coronavirus Relief Fund earlier this year, $9.5 billion of which was disbursed to the state with the intention of the state sending the money to smaller counties.
“Many of our smaller, rural counties are facing extreme budget deficits as a result of COVID-19,” LaMalfa said. “The CARES Act created a fund to assist local governments, but Governor Newsom refuses to disburse the aid. In fact, it seems that he is actually blackmailing our local governments in to complying with his shutdown orders, even when several counties in the North State have yet to experience a widespread outbreak. However, as coronavirus cases increase in our region, counties who have yet to receive aid will have to bear the brunt of coronavirus costs. Our counties need this money now more than ever, and the Governor needs to disburse it immediately.”
Here’s the text of the letter.
We are writing today in response to reports from our local health officials that your office has given notice to several counties that Federal funding from the Coronavirus Aid, Relief and Economic Security (CARES) Act would be withheld if they do not fully comply with mandates created by the State. All of us, as Members of the California Congressional Delegation, share your concern with the rising number of active COVID-19 cases in California. Choosing this moment to threaten local government funding is unhelpful and counterproductive.
Congress intended for the Coronavirus Relief Fund authorized and appropriated in the CARES Act to serve as an immediate $150 billion line of aid to every state and local government in the nation. California received, by far, the largest allocation in the country: $15.3 billion, of which $9.5 billion was disbursed directly to the State. California’s 2020 Budget tepidly directs $1.8 billion in federal funding to cities and counties, including those that already received direct payments from the U.S. Treasury. This funding is needed to help counties and cities train contact tracers, expand local healthcare capacity, and provision any other assistance needed. Yet as of July 1st, California has delivered almost none of this Federal aid to local governments and counties.
By withholding CRF payment disbursements from these localities, the state is creating winners and losers. In addition, guidance issued by the U.S. Department of the Treasury regarding implementation of the CRF clearly says that states cannot impose restrictions on transfers of funds to local governments that go beyond requirements outlined in Section 601(d) of the Social Security Act. Accordingly, we believe that the state may be inappropriately withholding CRF funds to localities by imposing conditions on such disbursements that are inconsistent with the Treasury Department’s guidance and Section 601(d) of the Social Security Act.
As COVID-19 positive cases in California increase once again, our local governments are left with fewer options and less funding than they had earlier this year. Rather than continue to withhold federal funding in exchange for compliance with state mandates, and to ensure that the state is in full compliance with the Treasury Department’s guidance and the law, we ask that you expeditiously release this funding to our local officials.
LaMalfa and California Republican congressmen Kevin McCarthy, Tom McClintock, Ken Calvert, Devin Nunes, Mike Garcia and Paul Cook signed the letter.