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By Charlie Vincent
Signed into law on March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) contains 880 pages of legislation designed to provide short-term and emergency relief to effectively every sector of our economy. One particular provision of the CARES Act creates the Coronavirus Relief Fund (CRF), which is expected to distribute $1.25 billion to Delaware (and the New Castle County government)later this month.
Under the CRF allocation formula, the $1.25 billion is expected to be split to allocate $322.7 million for the New Castle County government, with the remaining $927.2 million going to the State of Delaware (including for programs that help Delawareans living in New Castle County). For the state, $927.2 million represents approximately 21% of last year's $4.4 billion budget. In addition to the CRF, there are other provisions in the CARES Act that provide some interim and additional relief to other sectors of the economy directly or through federal agencies, such as the $66 million in transportation funds secured for the State by the Delaware Congressional Delegation.
CRF funds must be used for necessary expenditures related to the public health emergency created by COVID-19; were not accounted for in the state or local government's most recently approved budget; and were incurred between March 1 and December 30, 2020. Delaware and New Castle County are afforded wide discretion to determine how to spend the CRF funds and should give these decisions strong consideration, in addition to also considering whether the time has come to tap into the state's Rainy Day Fund.
What should Delaware and New Castle County use its CRF funding for?
Having nearly a billion dollars injected into Delaware's pockets (plus another $322.7 million injected into New Castle County government's) will help relieve some of the short-term shock that our economy has had to absorb over the past few weeks. Certain sectors and populations have been acutely affected more than others. For example, roughly 30% of the national economy works in three sectors—schools, retail, and hospitality. In Delaware those sectors represent 41% of our economy. Nonprofits work within these and effectively every other sector, representing approximately 12% of Delaware's workforce.
Both the State and New Castle County governments should strongly consider allocating CRF funds to the nonprofit sector. The state legislature could consider a one-time grant to all organizations
that received Grant-in-Aid in FY20, perhaps at an amount of between 50% and 100% of what were allocated in the most recent budget. Both the state and New Castle County could provide additional funding to one or both of the COVID-19 relief funds being operated by Delaware Community Foundation and United Way of Delaware, in addition to those organizations currently working nonstop to provide essential services and healthcare, food, shelter, and other resources to the most vulnerable Delawareans among us.
It is an understatement to say that there will be spirited debate in Dover and elsewhere over how the CRF (and other) funding should be distributed at the state and local level. The sheer speed at which the COVID-19 pandemic has impacted every facet of our lives as well as Delaware's economy is unprecedented and requires an equally unprecedented decision-making process from all levels of leadership in every sector and organization across the state. These funding decisions need to be given critical—and expedited—consideration, and we need to continue working together in making these and other decisions (all while keeping physically distant) for as long as it takes.
Charlie Vincent is executive director of Spur Impact Association, a 501(c)(3) nonprofit whose mission is to be the premier hub connecting young professionals and inspiring them to get involved and make an impact in their career and community. Charlie is a member of the board of DANA. He is also a member of the Governor's Commission on Community and Volunteer Service in Delaware. A more comprehensive analysis of the CRF and other provisions of the CARES Act can be found at spurimpact.org