Washington, D.C.—San Jose and Santa Clara County are set to receive approximately $212 and $374 million, respectively, through the American Rescue Plan to help offset the economic fallout from the coronavirus pandemic.
“I think if you talk to the residents who won’t lose their business or their homes, they’ll think this is a pretty big deal,” Rep. Zoe Lofgren told San José Spotlight. “I’ve heard from people who are very appreciative. People pay taxes all their lives and now when they need help, they’ve got some.”
The San Jose Democrat said the funds will stimulate the economy, boost COVID-19 prevention efforts, support workers and businesses and protect government employees and services from budget cuts.
The American Rescue Plan, a sweeping $1.9 trillion coronavirus-relief package signed into law in March, provides $350 billion overall to state, local, territorial and tribal governments. California’s budget—which was already faring far better than expected—will receive a staggering $27 billion cash infusion.
A modified version of the formula used for federal Community Development Block Grants was applied to determine the amount of relief for individual city governments. Local governments will receive the money in two portions, with half of payments beginning in May and the other half arriving about 12 months later, according to the U.S. Department of the Treasury.
In a statement to San José Spotlight, Mayor Sam Liccardo said he appreciated the dedication and persistence of federal leaders who fought to support local governments.
“These relief dollars will provide the necessary funds to increase our emergency rental assistance, expand transportation infrastructure, digitally connect families and create much needed living-wage employment opportunities,” he said.
The funding for state and local governments was among the plan’s most divisive provisions. Republican legislators objected, with some dubbing it a “blue state bailout” they said was mainly needed in Democrat-led cities and states that enforced stricter shutdowns.
Lofgren objected to this notion.
“There is no evidence for that,” she said. “They just throw this stuff out in the wind.”
Some local public employees are grateful more federal funds are on the way.
John Tucker, a union representative for the local branch of the American Federation of State, County and Municipal Employees, said public workers already had enough on their plate this year without having to worry about job security.
“Many have not been able to enjoy that work-from-home status,” Tucker said. “In most cases, our members were essential workers and have been out day-to-day facing the virus to keep the city running. It’s certainly been stressful.”
The San Jose Fire Department also experienced a harrowing year, according to Matt Tuttle, president of San Jose Firefighters Local 230. He said more than 60 firefighters were infected with COVID-19 and several required hospitalization. Firefighters also faced a record-setting wildfire season.
“Many fire departments across the nation were forced to cut back positions and close apparatus to overcome the financial difficulties faced by cities,” Tuttle said. “The federal funding that has come in to help cities recover has saved countless jobs, which was a very big concern for us as a union.”
But Tuttle is concerned about exactly how the latest allotment of federal money will be spent.
“I do worry how our city leaders and elected officials will treat and acknowledge our antiquated staffing levels and (whether they will) properly invest in prioritizing the fire department,” he said.
San Jose is currently determining how to use the money from the American Rescue Plan.
According to Jim Shannon, the city manager’s budget director, the 2021-2022 proposed operating budget sets aside $45 million from the plan to patch an ongoing general fund shortfall of $38.3 million, in addition to continue funding some programs previously paid for “on a one-time basis.”
Additionally, the proposed operating budget includes $2.5 million from the American Rescue Plan to address an anticipated shortfall in the Convention and Cultural Affairs Fund, which captures revenues and costs associated with operating the city’s convention center and other facilities supported by hotel taxes.
The city held a recent study session on economic recovery, Shannon said, and the city manager’s office plans to release a budget addendum next week with recommendations based on feedback from the session.
The San Jose City Council outlined several priorities, including education, child care, nonprofits, small businesses, emergency housing, homeless encampment trash collection and ensuring the city can support a multi-year recovery effort.
“These allocations will be revisited and updated as the city continues to engage the community and our service delivery partners, and as we learn more about the eligible uses of the American Rescue Plan funding,” Shannon said.
In a statement last week, Lofgren praised public workers throughout the state. She said Californians relied on teachers, first responders, public health officials and other government employees during the pandemic.
“These workers stepped up and kept our communities afloat,” she said. “We owe them a debt of gratitude, and the least we can do is prevent them from losing their jobs.”
Contact Katie King at [email protected] or follow @KatieKingCST on Twitter.