MARCH 26, 2021
Kuttner on TAP
Needed: More Rescue Funds for the Poorest Communities
The Biden $1.9 trillion rescue legislation is a magnificent accomplishment. But anything of that scale rushed through Congress is bound to get a few details wrong.

One such detail was the precise allocation of funds to municipalities. The rescue act committed $350 billion to states and localities.

The drafters of the program were not able to create a new formula based on poverty or COVID impact. So they used an off-the-shelf aid formula created for the 1974 Community Development Block Grant program.

In that era, unfortunately, more-affluent communities had to be given a big piece of the action in order to get broad congressional support for the program generally. But that formula is a lousy one for current needs.

As The Boston Globe has reported, more-affluent communities have gotten far more aid than comparable poor communities. For example, the affluent suburb of Newton, Massachusetts, average income $149,667, got three times the aid per capita as much poorer Methuen, where the average income is $32,436.

Chelsea, one of poorest cities in the state, got the same per capita aid as affluent Manchester-by-the-Sea. Chelsea’s COVID infection rate is 20.5 percent. Manchester’s is just 3.7.

According to my reporting, there is no easy way to reprogram funds after the fact. Some state governors, who also need committed federal funds for their own needs, have offered to give some modest revenue sharing with the hardest-hit cities.

But clearly, in the next round of aid, Team Biden needs to include some extra help for the poorest. Even when government deliberately tries to target the needy, them that has, gets.

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