The Senate’s proposed stimulus bill includes most of what governors had asked for in direct payments to states, but key state leaders said the amount wouldn’t be enough to cover the costs of responding to the pandemic and offset revenue lost to the declining economy.
The bill would create a $150 billion Coronavirus Relief Fund for state, territorial, tribal and local governments. All but $11 billion would go directly to states. The $11 billion would be for the District of Columbia, territories and tribal governments.
Local governments with 500,000 or more residents would be able to apply for their own direct funding, with smaller ones needing to go through their state sums. A population-based formula would determine the amount each state receives, with no state seeing less than $1.25 billion, including funds set to local governments.
The fund, one of the last measures added in the final hours of negotiation, reflects a request the National Governors Association made last week for a $150 billion state stabilization fund. But NGA leaders, citing revenue lost to the declining economy, said Wednesday it wasn’t enough.
Republican Maryland Gov. Larry Hogan, chairman of the NGA, said he was encouraged by the funding but it’s “not nearly enough for us, or for other states.” States would continue pushing for more federal help in future stimulus packages, he said.
New York Gov. Andrew Cuomo, a Democrat and vice chairman of NGA, called the bill “terrible” during his daily news conference Wednesday, saying the amount allocated to New York, which has been hit particularly hard by the outbreak, is a “drop in the bucket.” The state would receive $3.8 billion, Cuomo said, while New York City would receive $1.3 billion.
States and local governments have incurred much of the cost of responding to the COVID-19 pandemic, while the economic fallout has caused a severe drop in revenue they expect to persist.
The funding would only cover costs directly related to COVID-19 responses from March to the end of 2020. The restrictions on spending mean the bill can help states with their additional costs but doesn’t address the overall revenue losses they use to fund regular operations.
Matthew Chase, executive director of the National Association of Counties, said while the funding would help, the lost revenue was a major concern for his members.
Marilyn Kirkpatrick, chairwoman of the Clark County, Nev., Commission, said on a conference call with reporters her county, which includes Las Vegas, projected lost revenue of $1.1 billion.
The bill does include spending to help hospitals, transit systems and airports, which sometimes depend on state and local governments for parts of their funding.
The bill also includes sections meant to speed up production of needed medical supplies like ventilators to treat severe COVID-19 cases and protective equipment for healthcare workers. Governors and local leaders have consistently called for the federal government to address a shortage of those supplies.
Lauren Clason contributed to this report.