States Call on the Federal Government to Provide $500 Billion in Coronavirus Relief Funding
The National Governors Association (NGA) is calling on the federal government to provide further economic assistance to the states to combat the economic devastation caused by the novel coronavirus. In a recent release, the NGA criticizes the CARES Act (the largest federal stimulus package ever passed) for not providing any direct funding to offset drastic state revenue shortfalls. States in particular are losing out on tax revenue and unlike the federal government, states cannot increase borrowing. Furthermore, many states have balanced budget requirements making federal funding all the more important in as tax revenues decrease and spending goes up.
The NGA calls on Congress to provide immediate, direct federal assistance to all states. Further, the NGA asks that any state stabilization funds for lost revenue allotted by the federal government not be tied to COVID-19 related expenses. The reasoning for this is that states are seeing across-the-board economic devastation in areas not directly impacted by the pandemic, but that are experiencing very real loss indirectly.
The NGA also calls on Congress and to appropriate an additional $500 billion specifically to “states’ budgetary shortfalls that have resulted from this unprecedented public health crisis.” And even with that additional funding, many governors still believe there will be a significant shortfall when it comes to balancing state budgets.
The $500 billion number was chosen after the Center on Budget and Policy Priorities projected a historic $500 billion shortfall for states through June 2022.