Introduction

Your state budget has been decimated both by your spending and by a large decrease in expected tax revenue as income tax receipts have dropped (people without income can’t pay income tax), and sales tax receipts have virtually stopped altogether. It is unclear how you will ever get through the rest of the year without either raising taxes (how? And on whom?) or laying off state employees (teachers? Police? Firefighters?).You are pondering how your state will ever raise enough money to pay for more help – let alone the year’s usual expenses - when Carole rushes in with a news update: the federal government has announced it is making emergency funds available to states in both block grant and categorical grant programs. In times of emergency, it is much easier for the federal government to expend their resources than state governments, most which (including yours) are constitutionally required to have a balanced budget where expenses cannot exceed revenue. Federal funds will allow you to avoid that issue and get your people more help.

The Economic and Social Relief Grant is a block grant that aims to regenerate and restore communities that have been impacted negatively by the pandemic. The federal government is willing to grant up to to your state government in order to foster social and financial resilience in their constituents.

The Health and Human Services Assistance Grant is a categorical grant that supports healthcare workers and first responders only, up to . To be eligible for this federal funding, state expenditures must meet three conditions. First, the state must comply with spending regulations and only devote funds toward medical related expenses incurred due to the public health emergency. Second, they must not be accounted for in the state’s most recently approved budget. Lastly, the expense must be incurred on or after the declaration of the state of emergency.