Governor Proposes Allocation of Federal Funding for COVID-19 Response

Governor Cooper released a budget proposal on Friday for how to invest $1.4 billion of the federal funding NC will receive from the Federal CARES Act. Full House and Senate budget proposals have not yet been released, but we should see action there this week. This $1.4 billion represents only a portion of the federal funding NC is expected to receive for COVID-19 emergency relief and recovery.

The Governor’s proposal includes:

Governor’s Budget ItemsFederal Funds (in millions)
Immediate Public Health and Safety, including:$313
School nutrition$78

Testing, tracing, trends, and personal protective equipment (PPE)


Targeted support for rural and underserved communities


Additional Medicaid costs$40
Food, safety, shelter and childcare$25
Public health, mental health and crisis services$20
Continuity of Operations for Education & State Government Services, including:$740
K-12 Education$243
Higher education$77
Transportation operations$300
State government revenue$80
State agency and ports revenue losses$40
Small Business & Local Government Assistance$375

Special provisions are here.

Here’s some more detail on intended use of the funds that directly impact early childhood:

K-12 Education ($243 million) “provides emergency flexible relief funding for Local Education Agencies’ (LEA) mitigation and response costs. Funds may be used to implement enhanced remote learning capabilities, to provide additional support for Exceptional Children, to support the social and emotional needs of students, to provide remediation to students not yet proficient and/or unable to access online learning, to purchase supplies and equipment for more frequent sanitation of facilities and buses, and to assist with compensation for more than 28,000 locally-funded LEA employees. Funds may also be used to provide supplemental programs and support to K-3 students who were performing below grade level prior to school closures and are at risk for falling further behind in math and reading proficiency.”

School nutrition ($78 million) “provides funds for continuity of critical school nutrition programs across the state. Schools are currently providing more than 500,000 meals per day, a critical service that cannot be easily transferred or assumed by another entity. At the same time, estimated loss in revenue is at least $8 million per week. School nutrition and transportation staff need incentive pay as essential workers, and school districts are challenged with competing priorities including resources for necessary remote learning costs. Funds will be used to provide incentive bonuses and/or additional pay for school nutrition and transportation staff involved in the preparation and distribution of meals and food packages; to expand programs to include all family members; and to buffer revenue loss of federal or local receipts.”

Food, safety, shelter and childcare ($25 million) “provides funds for food banks, support for residential settings that are incurring additional costs to mitigate spread or isolate positive cases (Special Assistance), adult and child protective services response, support for homeless and domestic violence shelters and housing security (prevention, diversion, and rapid re-housing), child care response, and technology modifications to support COVID-19 emergency relief to beneficiaries.”

NC General Assembly Will Respond this Week

The Legislature reconvened on April 28th for a short session to address the use of federal emergency funds and are considering legislation. House and Senate proposals are expected to not be too different from the Governor’s proposal. Policymakers have said that state funds are not being considered during this week.

The Legislature expect to return this summer for a short session on the state budget and to allocate additional federal funds available for recovery.

NC Expected to Receive Additional Federal Funding

The Center on Budget and Policy Priorities has estimated the amount each state will receive from two of the bigger pots of federal money in the CARES Act – the Coronavirus Relief Fund, and the Education Stabilization Fund.

  • The Coronavirus Relief Fund can be used to meet costs associated with the virus. North Carolina is expected to receive $4.1 billion from this fund.
  • The Education Stabilization Fund can be used for K-12 schools, colleges and universities and “emergency relief” that governors may use to distribute to the schools, colleges, and universities that the virus and downturn have particularly affected. NC is expected to receive a total of $831.6 million from the Education Stabilization Fund, including:
    • $378.4 million for K-12 schools
    • $357.6 million for higher education
    • $95.6 million for emergency relief to particularly affected schools

NCECF reported on the first three federal emergency packages passed by Congress. On Friday, April 24, Congress passed another $484 billion relief package, which added $321 billion to the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses. The PPP ran out of its initial $350 billion fund in two weeks. The bill also includes $100 billion for hospitals and more virus testing. The package does not provide additional direct relief to state and local governments.