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Berkeley Set to Receive $68 Million in COVID-19 Relief Funds

While it is currently unclear where exactly the money will go within the city, budget discussions with city leadership and community input will help provide insight into which areas are most in need.

In late January, US President Joe Biden unveiled the American Rescue Plan, a plan that aims to address both the social and economic impacts caused by the COVID-19 pandemic. It serves to directly assist those in need, help small businesses, push forward with vaccinations, and work towards schools reopening.

As part of the plan, which was recently passed by Congress, Berkeley is estimated to receive about $68 million in relief funds. This money will come in two installments spaced about one year apart. With some lack of clarity on exactly where the funds can be distributed within Berkeley, the city is looking to hold budget discussions in the coming months. Through these discussions, they hope to receive input from the Berkeley community to determine where the funds should go.

While the general categories for the distribution of the $68 million are clear, any restrictions on the dissemination of funds have not been laid out in full. This is initially due to a lack of information from the federal government, with the Department of the Treasury yet to announce the specifics of any regulations upon the use of Rescue Plan funding. Seemingly, Berkeley will be under mainly federal regulation, as with a population greater than 50,000, the city will be receiving its funds directly from the federal government.

A significant portion of these funds will be directed towards locally-owned businesses. With a total of $10 billion provided to state and tribal governments in this category, the act includes a focus on businesses owned by women and minorities. This is intended to help such businesses that were especially affected by the pandemic, allotting $1.5 billion for state support.

As an incentive for support of the above types of businesses, the Rescue Plan incorporates a boost to certain states’ funding tranches. This means that states who already display trends of assisting more vulnerable local businesses will receive part of the allotted one billion to give assistance to the partitions of state funding.

A final way in which the Rescue Plan injects capital into small business support is by specifying a quantity for the support of very small businesses. The law partitions $500 million among states for giving support to businesses with fewer than ten employees.

Beyond this, the Rescue Plan provides funds for state governments to allot in such areas as fiscal recovery ($350 billion), updating infrastructure ($10 billion), homeowner assistance, especially of socially disadvantaged households ($10 billion), and unemployment assistance.

Given that Berkeley has been hit hard by the pandemic, there is much hope that the federal aid will assist the city and its citizens in pushing out of the economic stall.

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