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WASHINGTON, DC 20510

April 21, 2020

The Honorable Steven T. Mnuchin
Secretary of the Treasury

US. Department of the Treasury
1500 Avenue, NW
Washington, D.C. 20220

Dear Secretary Mnuchin,

Thank you for your work so far to implement the Coronavirus Relief Fund (the Fund) that was
included as part of the CARES Act. The $2.26 billion that Ohio received on April l6, 2020 is an
important ?rst step toward providing relief to our state and localities. However, as Ohio stands
ready to receive its total $4.5 billion in support through this fund, we ask you to issue additional
guidance on how state and local governments can use these funds moving forward, including as
revenue replacement. We also ask that you work with us to ensure that new funding for state and
local governments beyond the CARES Act is robust, dedicated, and ?exible, allowing
governments to provide critical services and address signi?cant budget shortfalls associated with
the coronavirus pandemic.

In general, due to the unique nature and composition of Ohio?s tax revenue collection, providing
robust and ?exible funding to state and local government will be critical to Ohio?s response to
the ongoing health and economic crisis. Ohio state and local governments collect signi?cant
portions of their revenue through income and sales taxes, compared to most other states that
collect a majority of their revenues through other more static revenue streams such a property
taxes. Income and sales tax collections tend to immediately respond to any positive or negative
economic swings, meaning that Ohio?s revenue collections are highly likely to plummet as a
result of current economic conditions. Speci?cally, according to a Brookings lnstituti on report1
from last month, four of the top ?ve cities that will feel the most signi?cant, immediate ?scal
impact are located in Ohio.

As we mentioned, the ?rst $2.26 billion sent to Ohio will provide needed support to our state and
local governments as they continue to address this crisis. While Governor Mike DeWine and his
administration have not ?nalized their plan to distribute this ?mding, they have indicated that a
portion of this funding will be directed to local governments, including those who cannot apply
directly to Treasury to receive ?inding.

 

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Local governments of all sizes will face serious revenue shortfalls in the coming months, due to
their reliance on sales and income tax revenue to ?nance their operations. As such, we ask that
you protdde immediate guidance that makes explicitly clear that funding from the CARES Act
Fund is allowed to be used to replace lost revenue.

As Congress considers additional support for state and local governments, we encourage you to
work with us to ensure necessary additional funding is robust, dedicated, and ?exible. We ask
that you work with us and the rest of our colleagues here in Congress to ensure that this
additional funding provides enough resources to governments to meet their residents? needs. We
also ask that you work with us to ?nd a way to provide more direct access to Treasury funds for
local governments under $00,000 in population. Finally, and in particular because of Ohio?s
unique budgetary position, we ask that you continue to provide maximum ?exibility to allow
local governments to use funds to replace lost revenue.

Bottom line, Ohio?s unique composition of tax revenues makes it much harder from our state and
local governments to ?illy respond to this crisis. Accordingly, we urge you to issue immediate
guidance that provides maximum ?exibility on how states and local governments can use these
funds including as replacement for lost revenue -- and to work with Congress to maintain and
expand that ?exibility in any nature allocations to state and local 

Thank you in advance for your consideration of this request.

 

 

Sincerely,
Rob Portman 8 erred Brown
United States Senator United States Senator

CC: Majority Leader Mitch McConnell
Minority Leader Chuck Schumer