Ducey allocates $441M in federal COVID-19 aid to local governments

Peoria mayor Cathy Carlat (right) talks with Gov. Doug Ducey as he meets with mayors to present the state's plan to allocate dollars from the CARES Act during the COVID-19 pandemic. Photo by Rob Schumacher/The Arizona Republic/USA Today Network | Pool photo

Arizona’s smaller cities and counties will receive $441 million of the state’s share of funding from a federal coronavirus relief package, while Gov. Doug Ducey will set aside the remainder of the nearly $1.9 billion the state received to cover other unemployment insurance and other costs arising from the COVID-19 crisis.

Government subdivisions with populations of more than 500,000 – Phoenix, Tucson and Mesa, and Maricopa and Pima counties – qualified for direct federal funding, getting nearly $1 billion in total federal assistance that Congress and President Donald Trump earmarked for Arizona in the CARES Act. The relief package gave the states discretion to provide portions of their funding to smaller entities.

The AZCares Fund, as the pool of money is called, will provide cities, towns and counties with money that they can use for pandemic-response costs related to police officers, sheriff’s deputies, firefighters, EMS and 911 service from March 1 through the end of the year. Correctional and detention officers at jails won’t be eligible for funding.

Surrounded by mayors and other local government officials at a press conference on Wednesday, Ducey said he crafted the plan to ensure that cities and counties would have maximum flexibility when it comes to how they can use their AZCares money.

“We are not going to lord over them as the state in terms of what decisions they make,” Ducey said at the press conference.

Though local governments are limited in how they can use the money, Ben Blink, Ducey’s policy advisor for transportation and technology innovation, explained to city and county officials on a conference call that they can use the money they save on expenses like firefighters, law enforcement and EMTs on other things

“With the monies that you’ve freed up, you can use those for business grants. You can use those for direct response. You can use those for whatever needs are within your local jurisdiction once those federal monies have been distributed,” Blink said.

At the press conference, Chandler Mayor Kevin Hartke said he’ll take recommendations from city staff and hold a work session to determine how to use the money, while Yuma County Supervisor Russell McCloud said the county will put together a committee or panel to take input from the public. 

Peoria Mayor Cathy Carlat said her city will use some of the money to help small businesses based on the recommendations of a task force and advisory committee.

“We want to know what they need and we will designate a portion of this funding specifically for grants and loans. And we will get that out into the marketplace as quickly as we possibly can,” Carlat said.

The state is using a formula devised by the U.S. Treasury Department to determine how much money each city, town and county receives. The funding amounts range from less than $100,000 for small towns like Hayden, Jerome and Winkelman, to tens of millions for heavily populated places like Peoria, Scottsdale and Glendale.

Ducey said the state won’t rush to spend the remainder of the $1.86 billion it received from the CARES Act, while Blink told local officials that the state must also be prepared for the possibility of a second surge in COVID-19 cases in the fall. The state is facing a projected budget shortfall of about $1.1 billion, though legislative budget staff warned that that number could shift by a half-billion dollars in either direction.

“There are going to be needs that are yet unforeseen at the state level. We’re all trying to get a handle on our revenues and where our economy is. But we wanted to make certain that we had enough that we could continue to pay and replenish our unemployment insurance benefits,” Ducey said.

Ducey has faced some criticism for how long it’s taken his administration to come up with a plan for relief to local governments. But he said there was a good reason for the delay.

“This is a significant amount of money … which we get to spend once. We wanted to do it the right way. We wanted input from local leaders as to what is needed. And we also wanted to have some idea around our revenues in Arizona, where our economy was,” Ducey said.