(Missouri Independent) – The plan for distributing money directly to Missouri counties in the current version of the $1.9 trillion federal coronavirus relief bill is pretty simple – each gets $195.44 per person.
But for cities, instead of a formula based on population, Congress divvies up the money using the method for determining Community Development Block Grant allocations. That takes into account levels of unemployment, age of housing, and other measures.
The 12 cities that qualify for direct grant allocations will receive amounts ranging from $6.9 million for O’Fallon in St. Charles County — $77.69 per person — to $423.2 million for St. Louis — $1,408 per person.
And there’s money for every other incorporated place, from $924 for Cave, population 5, to $13.1 million for St. Charles.
Overall, Missouri cities and counties would receive $2.5 billion to help them recover from revenue losses due to the pandemic. The money comes from $130.2 billion set aside in the legislation for cities and counties nationwide.
The biggest item in the bill is $422 billion for direct payments of $1,400 for each taxpayer with an income of $70,000 or less and $1,400 for each dependent. The bill, which would implement budget resolutions already passed in the House and Senate, is expected to come before the House for a vote by the end of the month.
The federal funding will bring welcome relief to budgets struggling from lost sales due to reduced business and added expenses for health departments, protective gear, and overtime, leaders of the state’s two largest lobbying groups for local governments said.
“It is a lot of payroll issues,” said Richard Sheets, interim executive director of the Missouri Municipal League.
“In general, it is county general revenue where there is always a shortfall,” said Dick Burke, executive director of the Missouri Association of Counties. “If these funds could be used to prop up county general revenue – and that remains to be seen – it will be welcome.”
Overtime increased as employees covered shifts for people sick with COVID-19 or in quarantine because of possible exposure, Sheets said.
Cities and counties rely heavily on sales taxes for revenue and spending has been buoyed by federal income support. But a lot of spending moved online, which puts it out of reach of most city and county sales taxes, and patterns of where people spend their money within the state have changed, Sheets said.
No crowds at baseball games meant other spending that accompanied trips to Kansas City and St. Louis didn’t occur. Many businesses have been on reduced operations, especially restaurants in larger communities, diminishing another source of revenue.
Some smaller communities saw spending shift from shopping destinations to hometown businesses as people avoided crowds, Sheets said.
In Columbia, which Sheets said is one of the “trade centers” where business has been disrupted, the City Council passed a budget in September that made cuts in every department, slashing 67 open jobs and laying off 11 employees.
Columbia would expect to receive $22.4 million if the bill passes.
“In the Moberlys and Macons (two cities in north-central Missouri), people were staying home and not going out as much and shopping locally,” Sheets said. “Branson and tourism cities have really been hit the hardest.”
On a per-person basis, Moberly, Macon, and Branson will get virtually the same amount, about $185 per person. That works out to $2.5 million for Moberly, $2.1 million for Branson, and $1 million for Macon.
The allocation for Branson isn’t enough to replace an estimated $7.2 million loss in revenue due to the pandemic. For other communities, like Kansas City, federal aid will be more than enough to replace revenue losses. Kansas City, which would receive $180 million, cut spending by $55 million, KMBC reported last week and plans on using $15 million in reserve funds in the current budget.
The simple calculation for counties gives each state a share of $65.1 billion based on population. That share is then divided so that each county gets the same amount as its portion of the state’s population.
The amounts range from $393,425 for Worth County, which has 2,013 people, to $194.3 million for St. Louis County, which has just under 1 million people. The city of St. Louis, which also performs the functions usually handled by counties because it is not in any county, will also receive the $195.44 per person, or $58.7 million.
The same patterns of shifting sales that impact city budgets also play on county finances. Local sales taxes stack up, with county taxes on top of state taxes and city taxes on top of both.
The per-capita allocations haven’t raised any questions from county officials, Burke said, but that may be because the bill could change at any time.
“I am not hearing anything yet from our counties on that because they know it is a bit premature,” he said.
And Burke said he’s not sure he knows enough himself to offer an opinion.
“I am not going to say yea or nay to that,” he said. “I don’t know why they picked it.”
The money in the relief bill is intended to make sure cities and counties can pay police, firefighters, and other public workers so communities are safe and essential services are maintained, U.S. Rep. Emanuel Cleaver, D-Kansas City, said in a statement to The Independent.
Cities and counties in the Fifth Congressional District would receive more than $350 million in support, he said.
“This will provide desperately needed funds to larger cities like Kansas City and Independence, but also to smaller towns like Marshall, Odessa, Higginsville, Mayview, Lexington, and many more—all of which are still facing financial strain from the pandemic,” Cleaver said. “While I will continue pushing for as much state and local funding as I can get for my congressional district, this will certainly help bridge the budget gaps COVID-19 has forced upon the Fifth District. In fact, I would say it is a step or 350 million in the right direction.”