by Todd Feurer, CBS Chicago web producerBy CBS 2 Chicago Staff

CHICAGO (CBS) — Gov. JB Pritzker announced $245 million in grants that will soon be available to small businesses still struggling during the COVID-19 pandemic, or damaged by looting earlier this summer. Meantime, the governor said state and local governments would be forced to lay off thousands of workers later this year, if Congress does not come through with federal funding to help them make up for lost revenue.

Applications for the second round of the state’s Business Interruption Grants (BIG) Program will be made available on Thursday afternoon, offering $220 million in financial assistance for small businesses that were hit hard by the pandemic. The program is funded by money the state of Illinois received from the federal coronavirus relief package approved by Congress in late March.

The governor said the federal Paycheck Protection Program, which offered loans to businesses to help them continue paying workers during the pandemic, overlooked too many small businesses.

“It was important to me and to the legislature to alleviate some of the burden that’s carried by these small businesses, particularly those facing long-standing structural barriers,” Pritzker said.

Pritzker said the first round of the BIG Program, which provided $49 million in funding for small businesses, was focused on those that were forced to completely shut down in the spring. The next round will be open to small businesses in every industry, with specific funding set aside for areas disproportionately affected by COVID-19. The governor said at least half of the grants will go to businesses in downstate and rural communities.

“Just like the virus attacks the health of our most vulnerable people, it also hits the most vulnerable parts of our economy,” Pritzker said.

According to the governor’s office, approximately $60 million will be dedicated to “heavily distressed industries,” such as movie theaters, performing arts venues, concert halls, indoor recreation centers, amusement parks, banquet halls, hotels, and more. Another $70 million will be set aside for so-called “disproportionately impacted areas,” identified by the Illinois General Assembly as communities that are among the most financially distressed, and most vulnerable to the pandemic.

At least half of all remaining funds will be reserved for businesses in downstate and rural communities.

Pritzker also announced $25 million in financial assistance from the state’s capital construction plan to create the Rebuild Distressed Communities Program, which will provide funding to businesses that faced significant repairs from looting this summer. That money will go to helping pay for repairs related to civil unrest, and to support investments in economically distressed areas of the state.

Meantime, the governor urged Congress and President Donald Trump to pass legislation to provide financial relief to state and local governments to replace revenue that has been lost due to the pandemic.

Pritzker warned that state and local governments in Illinois could be faced to lay off thousands of workers if they don’t receive help from the federal government to make up for lost tax revenue.

“This is a nightmare scenario, because at the end of the day, this isn’t just about local governments or state governments in Illinois. This is about support for local and state governments across the nation,” he said. “Without that support, our nation’s schools, hospitals, universities, law enforcement, healthcare workers, and firefighters will pay the price and it will be a heavy price.”

The governor said he already has informed the heads of all state departments and agencies to prepare for cuts of at least 5% in the current fiscal year, which ends June 30, if Congress doesn’t come through with financial aid. He said he also has informed agency heads to present a spending outline for fiscal year 2022 that would include a 10% reduction in funding.

“This is a nightmare scenario, because at the end of the day, this isn’t just about local governments or state governments in Illinois. This is about support for local and state governments across the nation,”

Pritzker noted Congress is only scheduled to be in session through the end of September before lawmakers leave Washington ahead of the November elections.

“Obviously, if we get to the end of September, then we’re going to have to start seriously looking at all these cuts, and making sure that we’re implementing the beginnings of what it will take,” he said.