Funding to Offset Local Government Budget Losses is Key to Next Aid Package, House Speaker Says

People walk among U.S. flags with the U.S. Capitol in the background, Sunday, March 15, 2020, in Washington.

People walk among U.S. flags with the U.S. Capitol in the background, Sunday, March 15, 2020, in Washington. AP Photo/Jacquelyn Martin

Connect with state & local government leaders
 

Connecting state and local government leaders

It would be a shift from the CARES Act, which restricts state and local aid to expenses associated with the coronavirus pandemic.

Funding that could be used to offset state and local government tax revenue losses from the economic crash the coronavirus outbreak has caused is “a very important piece” of ongoing negotiations over a pending emergency relief bill, House Speaker Nancy Pelosi said Thursday.

An “interim” bill that would include replenished funding for the Paycheck Protection Program, which offers support to small businesses, and other stimulus initiatives could be on the House floor by the end of the month, Pelosi said in a conference call with reporters. Democrats last week released a list of their priorities for an interim coronavirus package that includes $150 billion in funding for state and local governments that could be used to manage the public health  crisis and “mitigate lost revenue.”

“The fact that there is revenue lost as well as additional costs to fight the pandemic necessitates that we allocate more resources to state and local government,” Pelosi said, providing an overview of ongoing negotiations with Senate Republicans and Treasury Secretary Steven Mnuchin. Congressional leaders held initial talks over next steps with the Trump administration Wednesday and are going back for another round Thursday afternoon.

The CARES Act, signed into law last month, established a $150 billion Coronavirus Relief Fund to provide payments to states and local governments with populations over 500,000. But the law restricts use of the funds to “necessary expenditures” due to the public health emergency and incurred between March 1 and Dec. 30, 2020.

State and local governments have complained that with stay-at-home orders in place, millions of workers filing for unemployment, and the U.S. economy at a standstill, that they need money that can be used to offset a loss in revenues.

A recent survey of city government officials found that 88% of cities expect a budget shortfall this year due to the impact of the coronavirus pandemic on the economy. More than half of city leaders said they expect to have to cut public services as a result of those budget shortfalls. 

Before addressing the financial needs of state and local governments, Republican leaders have focused on the need to replenish funding being made available to small businesses. The Paycheck Protection Program, which distributed $350 billion in small business loans that can be forgiven if employers do not lay off workers, ran out of money Thursday. Republican-led efforts to add another $250 billion to the program were rebuffed by Democrats last week.

“This did not have to happen,” said Senate Majority Leader Mitch McConnell and House Republican Leader Kevin McCarthy in a joint statement issued Thursday. Last Thursday, Senate Republicans tried to pass a narrow and clean bill that would have simply put more money into this critical program without changing any of the underlying policies that passed the Senate and the House unanimously. Democrats blocked it.”

Pelosi said Democrats support providing more funding for small businesses, but they say that hospitals and local governments also have an urgent need for financial aid and should be included in discussions about an interim bill.

“They are in the hole, they have no cash flow coming in,” she said.

While the Paycheck Protection Program funding has already run out, the Treasury Department just began distributing money allocated through the CARES Act for state and local governments this week. Pelosi said Democrats want to see data on how money for the small business program is being allocated and used before committing to more funding.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.