COVID-19 Federal Relief Funds – Update

This article provides a general overview of COVID-19 federal relief funds.

Entities in Kansas are estimated to receive over $34.2 billion in federal relief in response to the COVID-19 pandemic through legislation that includes the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) of 2020, and the American Rescue Plan Act (ARPA) of 2021. This relief is provided through three means:

• Large discretionary funds provided to state and local governments;
• Non-discretionary emergency or supplemental funds provided to state agencies; and
• Funds provided by federal agencies directly to individuals and businesses, primarily as stimulus checks and loans.

Discretionary Funds

Coronavirus Relief Fund

The CARES Act allocated a total of $1.3 billion from the federal Coronavirus Relief Fund (CRF) to state and local governments in Kansas to aid in response to the COVID-19 pandemic. Of this, $1.0 billion was provided to state government and $215.9 million was provided directly to Johnson and Sedgwick counties.

Federal guidance stipulated that CRF moneys be used only for expenditures related to the pandemic, could not be used to fill revenue shortfalls, and must be expended by December 31, 2021.

In May 2020, the Governor established the Strengthening People and Revitalizing Kansas (SPARK) Task Force to make recommendations regarding the CRF, subject to approval by the State Finance Council. CRF moneys were allocated in three rounds:

• Round 1 distributed $400.0 million as general aid to county governments;
• Round 2 distributed $314.4 million to state agencies for broadband, small business grants, nursing home assistance, behavioral health grants, laboratory testing capacity, and early childhood education; and
• Round 3 allocated the balance of the fund primarily for a statewide COVID-19 testing strategy, child supervision, housing stability, unemployment insurance administration, and continuity of operations among various state agencies.

Additionally, the State Finance Council passed a resolution directing the transfer of any unspent remaining funds to the Kansas Unemployment Insurance (UI) Trust Fund.

State and Local Fiscal Recovery Funds

ARPA allocated a total of $2.6 billion from state and local Fiscal Recovery Funds to state and local governments in Kansas. In contrast to the CRF, ARPA allowed for revenue replacement and appropriated funds directly to state, county and city governments. For Kansas, these appropriations included:

• $1.6 billion directly to state government;
• $565.9 million directly to 105 county governments;
• $260.3 million directly to 10 metropolitan cities; and
• $167.4 million indirectly to 581 Non-Entitlement Units (NEUs), which are generally cities with a population below 50,000.

Fiscal Recovery Funds may not be used for pension funds, debt services, or to offset tax cuts enacted after January 6, 2022. Funds must be expended by December 31, 2026.

Non-discretionary Funds

State agencies received $3.9 billion in emergency or supplemental federal relief for defined purposes, as of September 2022. The largest of these included:

• $1.5 billion to the Kansas Department of Education, including $1.3 billion from the federal Elementary and Secondary School Emergency Relief (ESSER) Fund;
• $692.7 million to the Department for Children and Families;
• $554.4 million to the Kansas Department of Health and Environment;
• $326.0 million to the Regents universities.

Direct Relief to Individuals and Businesses

An estimated $23.8 billion was provided to individuals and businesses in Kansas, which primarily included:

• $7.3 billion in stimulus checks;
• $7.4 billion in low-interest forgivable loans through the Paycheck Protection program;
• $2.2 billion in federal unemployment benefits;
• $1.6 billion in payments to agricultural producers; and
• $1.4 billion to health care providers.