Billions Coming to Alabama through the CARES Act

Alabama is in line to receive more than $2.47 billion from the CARES (Coronavirus Aid, Relief and Economic Security) Act signed into law by President Trump on March 27. A supplemental act passed Congress on April 23.

Below, PARCA explores key provisions of the Act, with attention to funds allocated for state and local governments and schools.

These projections do not include funds for hospitals, medical providers, airports, the value of business tax credits, or funds for expanded unemployment benefits and the Paycheck Protection Program.

The CARES Act provides $2.3 trillion in funding for individuals, schools, state and local governments, and businesses. The Act, running more than 800 pages, is complex and expansive. Many organizations and law firms have provided detailed explanations of the CARES Act and general COVID-19 responses, including:

State and Local Governments

The Act allocates $150 billion to support state and local governments’ responses to the pandemic.

State Government

Of the $150 billion, $8 billion is allocated for tribal governments, $2.5 billion for territories, and $500 million for Washington, D.C. The balance is allocated to states on a per capita basis based on population figures in the U.S. Census Bureau’s 2019 Population Estimates. Regardless of population, every state will receive at least $1.250 billion.

Based on these numbers, Alabama can expect $1.9 billion in funding. The chart below displays the total funding each state can expect.1 Alabama’s share, like all states, is reduced by the amount of funding directed to local governments.

CARES Act COVID Response Funding to State Governments

StateDistribution (billions)
New Hampshire$1.250
New Jersey$3.444
New Mexico$1.250
New York$7.543
North Carolina$4.067
North Dakota$1.250
Puerto Rico$2.241
Rhode Island$1.250
South Carolina$1.996
South Dakota$1.250
West Virginia$1.250
Tribal governments$8
District of Columbia$495
U.S. TOTAL$150,000,000,000

Local Governments

Local governments with populations of at least 500,000 also receive funding through the CARES Act. Local funds are deducted from their states’ shares. In Alabama, only Jefferson County meets the population threshold. Jefferson County should receive approximately $114.9 million of Alabama’s allocation, reducing the state government’s share to $1.786 billion.

Allowed Expenses

These are not insignificant amounts—$144.9 million represents 20% of Jefferson County’s FY20 budget; $1.786 billion represents 10.7% of the budgeted General Fund expenditures.

However, leaders do not have full discretion over how funds may be spent. The CARES Act limits expenditures to those that “are necessary expenditures incurred due to the public health emergency,” 2 are not included in current budgets, and are expensed between March 1, 2020 and December 30, 2020.

“Due to” implies direct and indirect expenses arising from governments’ responses to COVID-19. These include direct medical and public health expenses and economic support for affected employees and businesses. Some states allow governments to make loans and grants to businesses. A recent opinion by Alabama Attorney General Steve Marshall states that transactions are prohibited under the Alabama Constitution.3

The Treasury Department provides examples of allowed and disallowed expenditures.4

Allowed ExpendituresDisallowed Expenditures
Direct medical expensesDamages covered by insurance
COVID-19 testingPayroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-19 public health emergency.
Emergency medical responseExpenses that have been or will be reimbursed under any federal program.
Public telemedicineReimbursement to donors for donated items or services.
Public health communicationsWorkforce bonuses other than hazard pay or overtime.
Personal Protective EquipmentSeverance pay
Cleaning and disinfecting public areasLegal settlements
Quarantine expenses
Payroll for public safety, public health, health care, human services, and similar employees responding to COVID-19
Food delivery to vulnerable populations
Facilitating distance learning for schools
Costs of sanitation and social distancing in prisons and county jails
Care for homeless populations
Unreimbursed unemployment insurance costs related to COVID-19

CARES Act funds cannot be used to offset declines in revenue, which are expected to be substantial.

Education Funding

The CARES Act provides $30.75 billion to education: $14.25 billion for higher education and $13.2 billion for elementary and secondary education.

Higher Education

Of the higher education funding, 90% is allocated directly to institutions of higher education. Allocations are based on the percentages of students receiving Pell grants. At least 50% of these funds must be used to provide emergency financial aid to students. The balance of the funds can be used for other purposes, including recouping student refunds for tuition, fees, room, and board, technology purchases for students, and additional aid to students.

Fifty-four institutions in Alabama should expect approximately $193.5 million in total funding with $96.8 million allocated to student aid.5

Public institutions are eligible for $167 million–$56.3 for two-year schools and $110.7 million for four-year schools.

Private institutions are eligible for $26.5 million.

SchoolTotal AllocationMinimum Allocation to  be Awarded for  Emergency Financial Aid  Grants to Students
Alabama Agricultural & Mechanical University$9,121,201$4,560,601
Alabama College Of Osteopathic Medicine$186,805$93,403
Alabama State University$6,284,463$3,142,232
Athens State University$845,033$422,517
Auburn University$15,769,779$7,884,890
Auburn University Montgomery$5,075,473$2,537,737
Bevill State Community College$2,642,839$1,321,420
Birmingham-Southern College$1,069,855$534,928
Bishop State Community College$2,871,392$1,435,696
Calhoun Community College$4,392,248$2,196,124
Central Alabama Community College$1,222,052$611,026
Chattahoochee Valley Community College$1,645,716$822,858
Coastal Alabama Community College$4,437,762$2,218,881
Drake State Community And Technical College$761,763$380,882
Faulkner University$2,422,978$1,211,489
Enterprise State Community College$1,240,737$620,369
Gadsden State Community College$3,756,166$1,878,083
Wallace Community College$3,655,757$1,827,879
Wallace State Community College$4,064,802$2,032,401
Wallace State Community College - Selma$1,298,325$649,163
Heritage Christian University$25,804$12,902
Herzing University$4,328,833$2,164,417
Huntingdon College$1,225,333$612,667
Ingram State Technical College$448,264$224,132
Jefferson State Community College$3,729,878$1,864,939
Jacksonville State University$6,050,640$3,025,320
Lawson State Community College$3,522,022$1,761,011
Judson College$369,009$184,505
Lurleen B. Wallace Community College$1,546,138$773,069
Northeast Alabama Community College$1,901,781$950,891
Marion Military Institute$514,237$257,119
Miles College$3,257,934$1,628,967
Northwest - Shoals Community College$2,069,470$1,034,735
Reid State Technical College$435,328$217,664
Oakwood University$1,573,749$786,875
Shelton State Community College$2,965,439$1,482,720
Samford University$2,381,353$1,190,677
Snead State Community College$1,239,198$619,599
Southern Union State Community College$3,196,100$1,598,050
Trenholm State Community College$1,892,834$946,417
Spring Hill College$1,372,682$686,341
Stillman College$1,206,208$603,104
Talladega College$2,069,544$1,034,772
Troy University$8,544,084$4,272,042
Tuskegee University$3,756,522$1,878,261
University Of Alabama$20,722,538$10,361,269
University Of Alabama At Birmingham$12,131,256$6,065,628
University Of Alabama In Huntsville$5,679,758$2,839,879
University Of Mobile$1,257,422$628,711
University Of Montevallo$2,560,001$1,280,001
University Of North Alabama$5,002,648$2,501,324
University Of South Alabama$11,408,535$5,704,268
University Of West Alabama$2,384,585$1,192,293

Elementary and Secondary Education

The $13.2 billion for elementary and secondary education is divided among the states based on the same formulas that allocate Title I funds — federal dollars that support low-income students.

The Alabama State Department of Education (ALSDE) is set to receive $216.9 million, 10% of the 2020 ETF budget. At least 90% ($195.3) is restricted to local systems. ALSDE can reserve up to 10% ($21.7 million) for departmental costs, including $1.084 million for administrative expenses. 6

ALSDE will disperse the $195.3 million to local school systems based on the systems’ shares of Title I funding in fiscal year 2020.

PARCA’s analysis of these numbers suggests the median dollar figure for Alabama schools in $780,000. Half of the systems would get more than this amount and half would get less. On the extreme ends, systems would get considerably more or less. PARCA estimates the largest allocation at $23.3 million and the smallest allocation at $84,000.

Final allocation numbers are expected from ALSDE soon.

Allowed Expenses

School systems appear to have more discretion than state and local governments. Authorizing legislation says systems can essentially spend these funds to:  

  • coordinate COVID-19 preparedness and response efforts
  • address the needs of special populations such as low-income students, students with disabilities, English learners, racial and ethnic minorities, and students experiencing homelessness
  • train employees on sanitation and minimizing the spread of infectious diseases
  • purchase cleaning and sanitation supplies
  • plan and coordinate during long-term closures
  • provide meals
  • provide technology
  • provide mental health services  
  • sponsor summer learning, including classroom instruction or online learning
  • sponsor after-school programs
  • address the needs of the individual schools

Maintenance of Effort

States cannot use these funds to supplant traditional education funding. The Act requires that in both 2020 and 2021, states budget and fund education at amounts equal to or greater than the average spent between 2017 and 2019. However, the U.S. Secretary of Education can waive this requirement.


The Act allocates $3.5 billion for childcare. The funds can be used to make payments to childcare providers dealing with declining enrollment or closure, provide childcare assistance to healthcare, emergency response, and sanitation workers, or for other needs.7

Exact allocations are not final, but based on guidance provided by the Department of Health and Human Services, Alabama could receive approximately $65.4 million. These funds are administered by the Child Care Services Division of the Alabama Department of Human Resources.

Public Transportation

The Act allocates $25 billion for transit agencies “to help to prevent, prepare for, and respond to the COVID-19 pandemic.”8

Alabama should expect to receive $59 million [efn_][/efn_note] to support COVID-19 responses in rural and inter-city transportation programs. This is approximately 300% of the total annual federal appropriation for rural and inter-city transportation in Alabama.

Additionally, local governments could receive almost $68.75 million to support COVID-19 responses in local mass transit programs.9


Community Development Block Grants

The Act allocates $5 billion for Community Development Block Grants (CDBG) and related programs managed by the U.S. Department of Housing and Urban Development. Jurisdictions have broad leeway in how to spend these funds, and the Act does not appear to specify that funds must be used in COVID-19 response. A HUD press release lists possible uses.

To date, the Department of Housing and Urban Development has announced $39.9 million in additional funds for Alabama through traditional Community Development Block Grants (CDBG) and programs for people who are homeless and for people with HIV/AIDS.[efn_fn]10

CityCDBGHome Investment PartnershipEmergency SolutionsHousing Opportunities for Persons With AIDSHousing Trust FundTotal
Jefferson County$2,414,493$1,022,067$204,775$0$0$3,641,335
Mobile County$1,622,148$580,826$0$0$0$2,202,974
Non-metropolitan areas$23,848,737$11,381,870$2,719,098$2,514,357$3,123,706$43,587,768

Emergency Virus Containment Measures Extended Statewide

State Health Officer Scott Harris, on March 19, issued a statewide ban on gatherings of 25 people or more, ordered restaurants to cease dine-in service, prohibited visitation at nursing homes, closed all schools and daycares, and public and private beaches. The public announcement can be found here.

The order, part of a State of Emergency declared by Alabama Governor Kay Ivey, states that, prior to April 6th, a decision will be made on whether to extend the order.

These and other measures included in the order are aimed at limiting the spread of the novel Coronavirus, COVID-19. The order’s protective measures mirror steps already taken in Jefferson and its surrounding counties and in Mobile county.

Alabama Department of Public Health (ADPH) is posting updates on its Coronavirus webpage, including statewide news updates and reported cases by county

But the true extent of the virus is unknown. The number of confirmed cases does not equate to the prevalence of the virus in a county. Testing has been slow to deploy. Results are not delivered for 24 to 72 hours. In some cases, long lines form at announced test sites, overwhelming their ability to take samples, and perhaps indicating high demand.

PARCA is updating a Coronavirus Resources page, which can be accessed to the right of the main menu on the homepage.