America’s governors are calling on Congress for $500 billion in emergency aid to keep their states from going broke amid the coronavirus crisis.
Republican Gov. Larry Hogan of Maryland, chairman of the National Governors Association, and Democratic Gov. Andrew Cuomo of New York, vice chair of the bipartisan group, made the plea Saturday, saying state budgets are running dry.
“While these public health strategies are working to protect the American people, they result in catastrophic damage to state economies,” Hogan and Cuomo said in a joint statement.
The governors said the $2.2 trillion stimulus package signed into law last month, known as the CARES Act, left out state governments, which are leading the response to the pandemic.
“Despite this grave challenge, the recently passed federal CARES Act contained zero funding to offset these drastic state revenue shortfalls,” the governors said. “To stabilize state budgets and to make sure states have the resources to battle the virus and provide the services the American people rely on, Congress must provide immediate fiscal assistance directly to all states.”
The difference between the debt-happy federal government and leaner state governments is that most states are required to pass balanced budgets each year. So big spending on the coronavirus response will lead to cuts elsewhere to critical services unless the federal government steps in to address the deficits, the governors association leaders say.
“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery, and — in turn — our collective effort to get people back to work,” Hogan and Cuomo said.
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., have said funding for state and local governments will be a priority in the next round of coronavirus relief funding.
This week, Democrats sought to pass $150 billion in funding divided among states, municipalities and tribal governments as part of a larger funding package aimed at small businesses.
Senate Majority Leader Mitch McConnell tried to pass a $250 billion narrow infusion of cash to a popular small business loan program on Thursday by unanimous consent, but Democrats objected and put forth their own alternative plan. Then McConnell formally rejected the Democrats’ $500 billion plan that would have included additional funding for states, hospitals and provisions for small businesses in disadvantaged communities.
While both Democrats and Republicans in Congress agree there is a need for another round of coronavirus federal spending, there’s an impasse currently and it’s unclear when another relief package may pass and what it would contain.