Our Leaders Must Understand the Realities of Small, Rural Communities to Ensure Pandemic Relief Funds Are Distributed Equitably
June 24th, 2021
New proposed guidance from U.S. Treasury to distribute pandemic relief money to local governments more equitably is step in the right direction
A year into the COVID-19 pandemic, local governments are still spiraling from the economic crisis it caused and the uneven distribution of crucial relief funds. The U.S. Treasury’s new proposed guidance to distribute pandemic relief money made available through the American Rescue Plan more equitably to local governments is a step in the right direction.
In 2020, many states distributed CARES Act relief funding from the Coronavirus Relief Fund to local governments on a reimbursement basis only. This means that to access the funds, counties and municipalities must have already made the eligible expenditures. However, many small municipalities and rural counties, especially those in low income communities in the Deep South, experienced challenges funding their day-to-day operations and were unable to benefit from these funds without help. As a result, small, rural towns in low-income communities and communities of color, such as those in the Delta regions of Louisiana and Mississippi, as well as the Alabama Black Belt, without pre-existing resources to purchase personal protective equipment (PPE) and other pandemic-related response items were most affected. By prohibiting states from funding on a reimbursement basis, new proposed guidance from the U.S. Treasury will push states to distribute these funds more equitably.
“For our communities, the opportunity to access the crucial funds provided to help states weather the pandemic was not accessible by design. We innovated and preserved to draw down funds that otherwise would not have been accessible. But, it should not have had to be that way. Too often, systems of oppression have been normalized so deeply that we don’t even recognize it and the necessary considerations of access and equity are not given their due attention. The use of the reimbursement model to distribute relief aid is a prime example” said Felecia Lucky, President at Black Belt Community Foundation. “This new guidance to make the funds available to our communities on a non-reimbursement basis – is a matter of life and death. It levels the playing field and sends a signal from our elected leaders that our communities are included and needs are considered in decision-making.”
“While states were not required to make these funds available on a reimbursement basis, many chose to run the programs in this manner, leaving behind the very communities that would have benefited the most from relief funds,” said Diane Standaert, Director of Hope Policy Institute. “This is yet another reminder that policy makers must always intentionally create systems and policies that support equity and justice so that all people, especially those most in need, are not left behind.”
In a recent analysis, the Hope Policy Institute reviewed the monies deployed to local governments in Louisiana through this reimbursement model. It found that the parishes already struggling to access resources before the pandemic, particularly majority people of color, rural and persistent poverty parishes, had trouble accessing their allocated portion made available through the Coronavirus Relief Fund. Further, by not supporting communities of color and rural areas equitably, recovery policy widened gaps between resource-rich communities and those with less, as the state moves beyond the pandemic. Local governments in the Alabama Black Belt faced similar challenges in accessing funds through this reimbursement model. HOPE and the Black Belt Community Foundation overcame this barrier by setting up a revolving loan program, where the Foundation advanced the towns up to $50,000, which was then repaid when the towns were reimbursed by the state. Through this partnership, HOPE and the Black Belt Community Foundation, with the support of philanthropic partners, channeled $1 million to 23 Black Belt communities. In one town, the relief made available through this structure ($24,000) accounted for half its town budget, an amount that would have been impossible to outlay for the purposes of seeking reimbursement. Even with this model in place, eligible towns still did not receive all that was needed.
The challenges encountered in the deployment of state-level CARES Act Funds serve as important lessons learned, both for structuring programs in a more effective way in the future and underscoring why rural persistent poverty areas, particularly communities of color, still need more resources to recover from COVID-19. Moving forward, government agencies charged with the distribution of funds must understand the realities of small, rural communities to ensure the funds are actually accessible.