The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Allocations

The sudden decline in economic output following the COVID-19 outbreak has significantly altered the fiscal outlook for state and local governments. A sizable share of economic output derives from state and local government activity. These governments are generally required to balance their operating budgets every one or two years. Early evidence suggests that the COVID-19 economic shock will have a notable impact on state and local budgets.