On Friday, March 27, 2020, Congress passed and the President signed into law the third COVID-19 stimulus package, also called the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act is expected to result in about $2 trillion nationwide to help respond to the pandemic.
The CARES Act includes a $30.75 billion Education Stabilization Fund to states, districts/charters, and higher education institutions. States must meet a maintenance of effort level to receive funds, which includes keeping general fund spending at or above average spending in fiscal years 2017 through 2019 for K12 and for higher education.
Arizona legislative staff at the Joint Legislative Budget Committee (JLBC) have provided an overview of estimated funding available in the CARES Act. Arizona’s share of total CARES Act funding is estimated at $4.2 billion. The following are early estimates of the impact these federal dollars will have, particularly in education.
- $68 million – Governor’s Emergency Education Relief Fund. The amount of funding to Arizona is based on population statistics, and these funds may be allocated at the Governor’s discretion to K-12 districts/charters, higher education, or other education related entities.
- $286 million – Elementary and Secondary School Emergency Relief Fund. These grants are based on our state’s proportion of Title I funding. (Title I provides financial assistance to public district/charter schools with high numbers or high percentages of children from low-income families.) Districts/charters will receive at least $257 million, in proportion to the amount of Title I-A funding they received. The state may retain up to $1 million for administrative costs and up to $27 million to address coronavirus-related emergency needs, as determined by the Arizona Department of Education.
- $280 million – Higher Education Emergency Relief Fund. This funding will go to universities and community colleges, and at least 50 percent of monies must be used for student grants. The funds will be distributed according to a complex formula, including the number of Pell Grant recipients, the number of low-income and minority students, and coronavirus burden.
Additional CARES Act funding is also provided for other programs impacting P-20 education, including:
- $85 million in Childcare Development Block Grant Funds to assist early education providers and provide subsidies for essential workers.
- $12 million for Head Start.
- $500,000 for runaway and homeless youth.
- $6 million for the state (and additional allocations for local governments) for Community Development Block Grant (CDBG) program to enable states, counties and cities to respond to economic and housing impacts caused by COVID-19, including the expansion of community health facilities, child care centers, food banks and senior services.
Further, state and local governments will each receive a share of the Coronavirus Relief Fund based on their population, which results in about $2.8 billion for Arizona. These funds can be used for costs that are 1) necessary expenditures incurred due to the public health emergency; 2) not accounted for in the state/local government’s budget most recently approved as of the date of the federal bill’s enactment; and 3) incurred from March 1, 2020, to December 30, 2020.
The Act lays out provisions for several other programs, including one-time directed payments to some taxpayers from the federal government; a fund overseen by the Treasury Secretary for loans, loan guarantees, and other investments to support business; and expanded, federally funded unemployment insurance benefits (see a further summary by JLBC of the Unemployment Insurance Program Changes).