Ohio Cities Await Billions In New Federal COVID-19 Aid

Cleveland firefighters at a city service station in 2016.
Cleveland firefighters at a city service station in 2016. Local governments are awaiting guidelines from the U.S. Treasury Department on how aid from the American Rescue Plan can be spent. Last year, the federal government allowed local jurisdictions to spend CARES Act dollars on public safety. [Nick Castele / ideastream]
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Ohio cities and counties expect billions of dollars to be coming their way under the latest federal COVID-19 stimulus bill, the American Rescue Plan.

The city of Cleveland could receive $541 million, according to estimates released by the U.S. House Committee on Oversight and Reform.

What cities can do with all that money is yet to be seen.

ideastream’s Nick Castele spoke with All Things Considered host Tony Ganzer about how Northeast Ohio mayors are reacting to the new funds.

Cleveland’s not the only city in Northeast Ohio due for federal aid.

Right, exactly. For instance, current estimates have the city of Akron receiving about $153 million. And the mayor of Akron, Dan Horrigan, sounded very optimistic about this. He said that could have a multi-generational impact.

“I think it’s going to affect not only my grandkids, but their kids after that,” Horrigan said. “If we have a chance to stabilize neighborhoods and keep people in their homes, those things last 10, 20, 25 years. When we can do maybe a youth job program in the city of Akron for high school seniors, we want to set that up to last for multiple classes of seniors that come through Akron's high schools.”

Suburbs are expecting substantial payments, too. For instance, Lakewood could be receiving about $50.3 million. About $40.5 million could be going to Cleveland Heights.

Are there going to be any limits on how cities can use this money, or do they pretty much have free rein to do with it as they please?

We don’t know yet what the limits are going to be. There will be some. Right now, mayors have been hesitant to say exactly how they want to spend the money for that reason.

Last year’s CARES Act dollars had to go toward COVID-related expenses, and there was sort of a back and forth between counties and the U.S. Treasury Department about the rules. The government later allowed it to be spent on certain staff, like safety forces.

This time, it seems that there will be fewer strings on the money.

“It seems to appear that there’s greater flexibility,” Parma Mayor Tim DeGeeter said. “So right now – as the bill was just signed by President Biden last week – we’ll look, take a collaborative approach here, with other citywide elected officials, our city council, what’s the best way to utilize those funds within the categories.”

Parma, by the way, could get an estimated $24 million. That’s enough to fund 40 percent of the city’s general operations for a year. So a pretty substantial chunk of money.

It is not a regular occurrence that cities have that much extra money laying around. You’ve said mayors have been cautious about making commitments, but surely some of them are thinking about bigger plans, maybe?

Oh, definitely. As one example, the mayor of Elyria, Frank Whitfield, says this could be the city’s chance to get people reliable broadband internet, for instance.

“We saw through this pandemic, and we’re still seeing, that if you don’t have a connection to the internet and a quality device, you are going to get left behind,” Whitfield said. “Even vaccinations. So many of the vaccinations, you have to sign up online.”

Now that said, cities have also lost revenue through the pandemic, especially in income taxes. They’ve had to make hiring freezes. So money could go toward getting budgets back on track, making up for that lost revenue and making cities whole.

There’s one other big unknown to think about, and that is whether cities will lose income tax money from former commuters who are now working remotely in a different town.

As I’m sure people know, you’ve got to pay income taxes to the city where you work in addition to where you live.

Greg Lawson is with the conservative think tank the Buckeye Institute. Now they are suing on behalf of some out-of-town former commuters who still paid income taxes to big cities in Ohio. Lawson says cities should focus on core services, things like public health, infrastructure, public safety, while this other question of income taxes is dealt with.  

“So I’d say that it kind of gives a bridge for some of the cities to be able to sort of manage their transition to sort of the post-COVID pandemic phase,” Lawson said.

Now one other thing to know is that cities will not be getting all this money all at once. It’s coming in two lumps over two years, and they will have some time to spend it. They’ll have until 2024 to get all this money out the door, which is a longer tail than they had with the CARES Act dollars.

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