A few weeks ago, the Town of Cottage City, Maryland received a huge financial windfall: over half a million dollars. That’s more money than the Prince George’s County town, which is located just across the D.C. line and is home to 1,300 residents, collects in property taxes every year.

The money comes from the American Rescue Plan, the $1.9 trillion COVID-19 stimulus package proposed by President Joe Biden and approved by Congress in March.

While the majority of the $350 billion bucket of state and local aid is going directly to states and a smaller commitment is earmarked for counties, a $19.5 billion pot is set aside for what are known as “non-entitlement units of local government” — in short, the small incorporated towns and cities that dot many states. These are places with their own local elected officials, and which usually have their own police departments and provide other municipal services.

And that money has been flowing.

In Virginia, $304.5 million in federal aid has gone out to 190 small cities and towns as of early July, according to Governor Ralph Northam’s office. Locally, that includes places like Herndon, Manassas, and Haymarket. In Maryland, $197.9 million has been distributed to 84 locales. Prince George’s County has the largest number of incorporated cities and towns in the entire state, 16 of which have gotten a payment of federal aid since July. Montgomery County stands in second place, with six. The towns run the gamut from pretty big (Takoma Park, population 18,000; $8.7 million first payment) to very small (Upper Marlboro, population 770; $331,500 first payment).

A second round of payments is expected to go out again next year. All told, Virginia cities and towns will get $633 million in federal aid, while their counterparts in Maryland will get $528 million.

“This is an infusion of cash that that will mean a lot to my constituents and a lot to constituents of municipalities all across this country,” says Colin Byrd, the mayor of Greenbelt, a city of 23,000 people that is set to get more than $22 million split into two payments over two years. (To put the scale of that infusion into context, Greenbelt has a $31 million annual budget.)

The CARES Act, the COVID stimulus bill that passed in March 2020, included $150 billion in federal aid for states and cities — but only those with populations greater than 500,000. Byrd says that he worked with House Majority Leader Steny Hoyer to include similar funding for smaller municipalities in the American Rescue Plan.

The aid, though, hasn’t been without some controversy. Since it is calculated largely based on the population size, critics say it ignores the reality that some places were more heavily impacted by COVID-19 than others. Chevy Chase, the wealthy Montgomery County town of 2,900, has received a payment of $1.2 million — and is likely to get a second next year.

Most officials in these small cities and towns are now focused on what they can — and can’t — do with the influx. Guidelines from the Treasury Department broadly say the money can be spent to respond to public health needs and economic damage from the pandemic, provide additional pay for essential workers, replace lost revenue, and on water and broadband infrastructure projects.

In Greenbelt — where the decision on how to spend the money will be made in consultation with the city council — Byrd says he has some priorities in mind.

“I would say it’s assistance to households — rental assistance and assistance for homeowners, be it related to mortgages or co-op fees. So that would be a very big piece of it in my mind,” he says. “But beyond that, providing aid to small businesses in the community, particularly those small businesses that are owned and managed by Greenbelt residents.”

In Cottage City, the first payment of $574,995 is worth more than a quarter than the town’s annual budget. Consuella Barbour, the town manager, says the three elected commissioners will work with the community to determine how best to spend it.

“It’s quite a bit for us to be able to have those kinds of resources,” she says. “That will replenish some of the revenues that we did lose [during the pandemic]. So that will help quite substantially. But I think what it will help more is in the future planning of the community and how to make the community more resilient for its residents.”

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