Governors Larry Hogan, the National Governors Association chair, and Andrew Cuomo of New York, the NGA vice-chair, are calling on the U.S. Senate to include state stabilizing funding in the next COVID-19 relief bill, which is expected to pass Congress in the next few weeks.
“The rapid economic downturn has left no region of the country untouched and has stressed every aspect of state delivery of critical needs and services to residents,” Hogan and Cuomo said in a joint statement. “In order to support states in the continuing pandemic response, a $500 billion state stabilization fund must be included in any COVID-19 relief package from the Senate.”
“States are ground zero in this fight. We provide the critical services Americans depend on, including public safety, education, health care, food assistance, local aid, and transportation, Hogan and Cuomo said. “We also employ more than 20 million people across the country. And yet, of the $3 trillion in aid from four relief packages, no unrestricted federal support to stabilize state budgets and account for the economic loss states face as a direct result to fight COVID-19 has ever been included.”
Counties, too, are making significant financial investments to address immediate public health and safety needs. At the same time, counties are experiencing massive and unprecedented declines in revenue as a result of the coronavirus pandemic.
The combined effect of these changes will likely undermine county revenue structures and support for education, public safety, roadway maintenance, and other essential services.
Alongside $30 billion of additional expenditures and $114 billion of lost county-generated revenue, the National Association of Counties (NACo) forecasts a $58 billion cut in state funding for counties as states collectively anticipate a $555 billion budget shortfall.
As previously reported on Conduit Street, the U.S. House of Representatives in May passed the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act. The bill includes two separate, equal funds for counties and cities and provides $187.5 billion in vital relief to counties to address both lost revenue and increased expenditures as the result of the coronavirus pandemic.
But, the U.S. Senate Majority Leader, Mitch McConnell, has previewed a proposal heavy on tax incentives or bonuses that aim to encourage people to return to work and school, along with broad liability protections for businesses and doctors during the pandemic. Majority Leader McConnell has previously balked at proposals to provide additional relief for state and local governments.
Stay tuned to Conduit Street for more information.