State and local government groups say the $1 trillion emergency coronavirus relief package announced by Senate Republicans late Monday ignores the economic realities of their needs.
The National Conference of State Legislatures said the proposal “ignores the economic realities in the states by not providing this critical aid.”
“While not all states are experiencing the same level of lost revenues, all are experiencing some degree of economic downturn,” said the NCSL. “States have already made across-the-board budget cuts, while many have furloughed public workers, postponed or canceled contracts, and delayed infrastructure projects.”
National League of Cities CEO and Executive Director Clarence Anthony described the proposal as “out of touch with the grim reality facing communities large and small across the nation, which local leaders of both parties have highlighted over the past several months.”
The package as outlined by several senators in floor statements does not include new direct funding for state and local governments or an increase in federal aid for the Medicaid healthcare system through an increase in the Federal Medical Assistance Percentage.
“As cities, towns, and villages everywhere have made clear, there will be no national economic recovery without a clear commitment from the federal government to address the staggering revenue shortfalls and skyrocketing costs that local governments have been forced to incur due to the bipartisan shutdown of our economies and communities,” Anthony said.
Mayor Jeff Williams of Arlington, Texas told reporters in a Tuesday conference call that 97 mayors in his state have sent their congressional delegation a letter requesting additional federal aid. Williams described the request similar to what would be asked for following a natural disaster.
If senators are serious about funding police departments, then they should get serious about funding the cities that pay their salaries, said Pittsburgh Mayor Bill Peduto, speaking on the same conference call.
The National Association of Counties released a more conciliatory statement calling the Senate Republican proposal “an important step in the bicameral legislative process.”
The Senate Republican proposal is being used as a negotiating tool with congressional Democrats who are supporting the much larger House-passed $3.5 trillion HEROES Act that includes $915 billion in direct aid for state and local governments.'
Negotiations began Monday night when Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows met with House Speaker Nancy Pelosi, D-Calif. and Senate Minority Leader Chuck Schumer, D-N.Y.
NACo also is seeking additional federal emergency aid. NACo said last week its newest estimate of the impact of COVID-19 on county budgets through fiscal 2021 shows a $202 billion gap, up from an earlier $144 billion estimate.
The NLC has joined with the National Governors Association in requesting an additional $500 billion in direct federal aid.
The Senate Republicans would give more flexibility to state, local and tribal governments for using the $150 billion previously allocated through the Coronavirus Relief Fund under the CARES Act.
“Flexibility to use CARES Act funds, while welcome, will not solve the problems facing cities, towns, and villages,” the NLC executive director said. “The CARES Act allocated only a small fraction of what is needed to prevent layoffs, cancellation of job-creating infrastructure projects, and interruption of essential municipal services.”
Distribution of the CARES Act funding also has been slow and uneven. A database compiled by the National Conference of State Legislatures shows that Ohio provided $100 million to K-12 schools, Pennsylvania distributed $625 million to counties, and Louisiana appropriated $300 million for small business grants under the program.
Although the Senate GOP plan does not have any new funding for states or municipal governments, it does include $105 billion for an Education Stabilization Fund, which Senate Appropriations Committee Chairman Richard Shelby said would “help schools adapt to the circumstances that they face, which is extraordinary.”
The education money would include $30 billion for higher education and $70 billion for K through 12 schools, said Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health Education and Pensions Committee.
Alexander said a third of the K-12 funds would be automatically distributed to schools while the remaining two-thirds would be reserved for “schools that are opening with students physically present, to help pay for the extra costs, providing that instruction in a safe environment.”
“If you're trying to open with students physically present, it makes logical sense to say that we have to have more buses, we have to hire more teachers, you have to have more protective equipment,” Alexander said. “Those schools need help paying for that.”
Shelby described the $105 billion for education as part of a $306 billion supplemental appropriation that would include $16 billion for states to ramp up testing with a particular emphasis on schools, employers, childcare facilities, and nursing homes. Another $26 billion would be targeted for the development and distribution of vaccines, therapeutics, and diagnostics.
Congressional Democrats said the overall package falls far short of what’s needed. And they vowed to include direct aid to state and local governments in the final package. Pelosi has estimated the additional needs of school systems at $400 billion alone.
A wide-ranging group of health and government organizations said in a letter to congressional leaders earlier this month that the group requested another 5.8% FMAP increase on top of the earlier 6.2% hike included in earlier emergency legislation to address the rapidly increasing number of Americans seeking Medicaid health coverage.
The letter noted that Medicaid represents the largest budget expense among the 50 states.
Senate Republican Majority Leader Mitch McConnell on Tuesday called the $1 trillion Heals Act unveiled by Republicans a day earlier “our framework for another round of historic relief for American workers and families.”
“Our nation stands at a challenging crossroad,” the Kentucky senator said. “We have one foot in this pandemic and one foot in the recovery. We can’t go back to April, and until we have a vaccine, we can’t go back to normal either. What the American people need is a smart, safe, and stable middle ground and they need Congress’s help to construct it.”
Schumer, the Senate Democratic Minority Leader, criticized his Republican colleagues for releasing “several separate drafts” of proposals “instead of presenting a single unified bill.”
“They can’t agree on one bill,” Schumer said. “They can’t get 51 votes for anything that’s comprehensive, that deals with the problems—the very real problems—that the American people face.”
“Two Republican chairmen have said that probably half of the Republican Senate will vote against their own proposals,” Schumer added.
