TOPEKA — State treasurers in Iowa and Kansas joined 15 of their peers Thursday to urge Congress to approve a $350 billion relief package of flexible aid to state and municipal governments struggling with revenue shortfalls tied to the COVID-19 pandemic.
The coalition of state officials offered support for a plan endorsed by President Joe Biden delivering aid to reopen schools, boost vaccination programs and keep essential government workers on the job. Objections from the Republican-led U.S. Senate and President Donald Trump stalled proposals last year to appropriate congressional funding to cover state and local government revenue shortfalls. The group of state treasurers seeking relief legislation said the potential revenue crater could surpass $500 billion over the next two years.
“This would help us tremendously,” said Iowa state Treasurer Michael Fitzgerald. “We’re suffering every day. We need this help from the federal government, and then we can start working on things that would really help our state grow.”
Lynn Rogers, state treasurer in Kansas, said Congress stabilized the nation’s economy during the recession of 2007 to 2009 with aid shared by state, county and city government. Infusion of additional federal relief during the pandemic can mitigate the need for deeper job cuts that reach the bone of government services, he said.
“Our unemployment is way too high in this state,” Rogers said. “If we don’t do this we will really have a tremendous lag in our economy.”
State treasurers in 17 states from Oregon to Maine and including Kansas, Colorado, Wisconsin, Iowa and Illinois sent a letter to their respective congressional delegations making the case that the health and economic emergency had taken a severe toll on municipal and state government that could only be remedied by the federal government.
Tax revenue, the letter says, plummeted while expenses associated with battling COVID-19 soared. State, county and city governments had to lay off 1.4 million workers from February to December 2020 in response to the pandemic, the letter says.
“Unfortunately, under current budget constraints, states and municipalities are forced to spend limited resources to fight the pandemic at the cost of shoring up businesses that are needed to revitalize our local economies,” the joint letter said. “As long as states and municipalities are forced to underinvest in economic growth to manage the current crisis, economic recovery will be slower than it needs to be.”
The coalition of state treasurers said city, county and state governments were drivers of economic growth through investment in infrastructure, such as roads, broadband and schools. Municipal and state governments also serve as partners with the federal government in distribution of unemployment relief and delivery of vaccines, the letter said.
Oregon state Treasurer Tobia Read said during a news conference hosted by Invest in America Action, which advocates for robust public investment, that additional federal funding was necessary for Oregon to safely open schools. The financial assistance will go to testing and personal protective equipment to get children back in school buildings and begin to address academic deficits arising during the past year, he said.
“This can’t go on. We owe it to our teachers and kids,” said Read, who believes schools could be pivotal to unlocking the economy. “This is one of those cumulative things. Students are missing out.”
Henry Beck, state treasurer in Maine, said the state had experienced the worst period of job loss since 1969 due to the downturn in tourism during the pandemic. He said the state anticipated a $100 million shortfall in revenue. The treasurer spoke directly to U.S. Sen. Susan Collins, a Maine Republican, to remind her of optimism she expressed during her 2020 re-election campaign about additional federal assistance.
“In her re-election campaign just a few months ago,” Beck said, “she said that she was hopeful that there would be included a provision for state and local aid. We have to move beyond being hopeful. It is critical that D.C. pass another round of relief, but this time with flexible direct aid.”