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Coronavirus (COVID-19) Local Government Fiscal Impacts

This page provides information on the fiscal impacts of the 2020 novel coronavirus pandemic (COVID-19) on local governments in Washington State, including revenue impacts, the American Rescue Plan and federal stimulus funding, and furloughs.

It is part of MRSC's Coronavirus (COVID-19) Resources for Local Governments series.

Latest Updates

To help you keep track of the rapidly changing situation related to COVID-19, here is a summary of recent changes to this page:

Thursday, September 30

  • The U.S. Treasury Department has extended the initial Local Fiscal Recovery Funds reporting deadlines for the Project and Expenditure Report. For counties and metropolitan cities, the reporting deadline has been extended from October 31, 2021 to January 21, 2022 and will cover the period between the award date and December 31, 2021. For non-entitlement cities and towns, the reporting deadline has been extended from October 31, 2021 to April 30, 2022 and will cover the period between the award date and March 31, 2022. See the Treasury email documentation.

Tuesday, September 7

Wednesday, August 25

Monday, August 16


The economic shock from the coronavirus pandemic has been sudden and unprecedented. Within the span of just a couple weeks, many businesses and public gathering spaces were shut down statewide, consumer spending on non-emergency items plummeted, and initial unemployment filings shattered old records. The full effect of these impacts will not be known for some time, but it is clear they will be significant.

Many local governments have seen their tax revenues drop, although certain tax revenues have actually increased in some cases due to the uneven nature of economic activity during the pandemic. At the same time, many local governments have seen increased expenditures related to the pandemic.

For helpful economic information and data, see the following resources:

Also see:

American Rescue Plan

On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law, including significant new federal funding for state and local governments. For more information, see the following resources:

As with all federal grant programs it will be important to meet federal compliance guidelines of 2 CFR 200 (Uniform Guidance). 


H.R. 748, the federal Coronavirus Aid, Relief, and Economic Security ("CARES") Act was signed into law on March 27, 2020. This massive and wide-ranging stimulus bill included significant aid for state and local governments.

Local governments with over 500,000 population received direct "Coronavirus Relief Fund" (CRF) distributions from the federal government, while all other local governments in Washington State received CRF distributions through the state Department of Commerce. These distributions were on a reimbursement basis using the Treasury Guidance for State, Territorial, Local, and Tribal Governments and the Commerce Local Government Coronavirus Relief Funds guidance.

The original deadline for states and direct federal recipients to expend CARES Act funds was December 31, 2020. In order for the state to meet that deadline, the deadline for all local governments under 500,000 population to expend funds was November 30, 2020, with the final reimbursement invoices due to the state by December 15, 2020.

The Coronavirus Response Relief Supplemental Appropriations Act (CRRSA), signed into law on December 27, 2020, extended the deadline to expend funds by one year until December 31, 2021. However, the State of Washington had already expended its CARES Act funds by that point, so the extension is a moot point in this state and no additional CARES Act funding or reimbursements are expected.

Other CARES Act provisions included increased supplemental Community Development Block Grant (CDBG-CV) funds and funding for a wide variety of existing federal programs. As with all federal grant programs it is important to meet federal compliance guidelines of 2 CFR 200 (Uniform Guidance).

Also see the State Auditor's Office COVID-19 Guidance Toolkit and Guidance on the Use of CARES Act Funds (June 30, 2020), with information on the CARES Act, auditing guidance, accounting and reporting resources, and more.

FEMA Reimbursement

It is important to document all costs (both direct and indirect) that may be eligible for Federal Emergency Management Agency (FEMA) reimbursement. For information on filing for FEMA reimbursement, see the following resources:

Accounting and Annual Financial Reporting

The State Auditor's Office has a COVID-19 Accounting and Reporting page providing all the BARS Manual and annual financial reporting news related to the pandemic. Due to difficulties encountered by some jurisdictions due to the closure of government offices, the annual financial reporting deadline for report year 2019 was extended to 11:59 PM on July 1, 2020 (see our COVID-19 Governor's Proclamations and State Guidance page for copies of the proclamations and extensions).

Furloughs and Layoffs

Fraudulent Unemployment Benefit Claims

Criminal actors are taking advantage of the coronavirus and unemployment crisis. Government employees have been targeted and have received what looks like legitimate ESD benefit claimant letters in the mail. Unemployment claims are also being made to their employing organization.

For more information, see our blog post Unemployment Claims Fraud Rises During COVID-19 Pandemic.

As local governments look to mitigating the fiscal impacts of COVID-19 on their budgets, many jurisdictions will be examining the possibility of temporary furloughs or permanent layoffs. For an overview of these considerations, see our blog post Furloughs and More: Employer Options During the COVID-19 Pandemic.

There have also been changes to unemployment benefit bills due to the CARES Act and the Protecting Nonprofits from Catastrophic Cash Flow Strains Act (signed into law August 3). For more information, see the Employment Security Department's July 17 letter to employers explaining upcoming changes.

Also see the local government examples below:

  • Auburn Furlough Leave Program FAQ – Auburn (2020) (April 17, 2020) – Answers frequently asked questions about the city's furlough leave program in response to COVID-19. City's program is an alternative to traditional furloughs and allows employees to essentially "buy" 46 hours of furlough leave to be used with supervisor's approval by the end of the year, in order to spread out the leave and minimize the impact on any individual paycheck.
  • Issaquah Ordinance No. 2905 (April 20, 2020) – Authorizes the mayor, city administrator, or designee to implement unpaid furloughs for non-represented positions and temporary salary reductions for high-level administrators from May 1 to December 31, 2020.
  • Mercer Island COVID-19 Workforce Reductions Memorandum (April 29, 2020) – Outlines layoffs and other actions to address revenue shortfall.

Last Modified: September 30, 2021