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Upton, Bipartisan Lawmakers to Introduce SMART Fund in the House of Representatives

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Washington, May 18, 2020 | Josh Paciorek (202-225-3761) | comments

ST. JOSEPH, Mich. – U.S. Representative Fred Upton (MI-06) today, along with Reps. Mikie Sherrill (NJ-11), Pete King (NY-02), Josh Gottheimer (NJ-05), Tom Reed (NY-23), Tom O'Halleran (AZ-01), Ted Lieu (CA-33), Brian Fitzpatrick (PA-01), Debbie Dingell (MI-12), and Elise Stefanik (NY-21), announced that they are introducing bipartisan legislation to provide robust support to state and local governments on the front lines of the COVID-19 pandemic. The State and Municipal Assistance for Recovery and Transition (SMART) Fund will provide $500 billion in emergency funding to every state, county and community in the country, while prioritizing assistance to the areas with the greatest need. This bicameral, bipartisan legislation is led by Senators Robert Menendez (D-NJ) and Bill Cassidy (R-LA) in the Senate.

 

The State and Municipal Aid for Recovery and Transition (SMART) Fund will enhance the $150 billion Congress provided to assist state and local governments in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, adding an additional $500 billion in funding. The additional federal support answers the call of the country’s governors, county officials, and local mayors who have been working around the clock to address the public health and the economic threat of COVID-19. It eliminates the current 500,000 resident population threshold, allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance, regardless of its size.

 

“Our nation is facing unprecedented challenges that require a historic response,” said Upton. “States and local communities have been working overtime to address this crisis, and many - including Michigan - now have severe revenue shortages. I have been in contact almost daily with the Governor and local leaders. It is abundantly clear from my discussions with them that our states and small communities need help, and this bipartisan legislation is the right solution to get resources into the right hands.”

 

Specifically, the SMART Fund would provide $500 billion to state, local, and tribal governments in order to avoid mass layoffs, steep tax hikes, and a breakdown of essential services. After a $16 billion set-aside for Native American tribal governments, the remaining funding would be allocated to states through three equally divided tranches:

 

  • One-Third Based on Population Size.  This tranche of funding will be allocated to all 50 states, D.C. and U.S. territories in proportion to each respective state or territory’s percentage of the U.S. population. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
  • One-Third Based on Infection Rates.  This tranche of funding will be allocated based on each state’s relative share of the nation’s infection rate.  States that have disproportionately high infection rates will incur significantly higher expenses and will likely need to continue stay-at-home orders for longer periods of time, leading to larger revenue losses. Counties and municipalities will each get a share of one-sixth of their state’s respective allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population for this tranche.
  • One-Third Based on Revenue Losses.  This tranche of funding will be allocated based on each state’s revenue loss in proportion to the combined revenue loss of all the states from January 1, 2020 through December 31, 2020. States that took strong actions to curb the spread of the coronavirus should not face additional budget shortfalls as a result of taking responsible action. Counties and municipalities will each get a share of one-sixth of their state’s allocation for a combined total of one-third of their state’s allocation from this tranche. Funding will be distributed to counties and municipalities based on each county or municipality’s revenue loss from January 1, 2020 to December 31, 2020 in proportion to the combined revenue loss for all counties and municipalities in the state over this period.  This is designed to ensure that adequate funding flows to counties and municipalities that are disproportionately affected relative to their population.

 

Under the formula, for example, if a state is awarded $6 billion in SMART funds, $4 billion would go to help stabilize the state government, $1 billion would be split among its counties and the remaining $1 billion dispersed to each of its municipalities based upon the respective criteria in each tranche.

 

All States, Puerto Rico and the District of Columbia shall receive a minimum of $2 billion combined from the first two tranches in addition to their allocation from the third tranche.

 

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