While McConnell plays politics, states face $765 billion in shortfalls in the next two years

While McConnell plays politics, states face $765 billion in shortfalls in the next two years

Nearly 1 million state and local public employees were furloughed in the month of April alone because of the coronavirus pandemic and the economic fallout. One million. In one month. But Mitch McConnell doesn’t see any urgency in acting, and in fact is still insisting the only way he’ll allow local and state aid in the next bill is if he gets a liability shield for employers who bring back their workers before it’s safe.

With the very real possibility that this economic crisis gets far, far worse, keeping state and local governments afloat is essential. As of now, the Center for Budget and Policy Priorities projects, states are looking at $765 billion in shortfalls over the next three years. That’s far worse than the shortfalls of the Great Recession of a decade ago. This, by the way, is just a projection for states not including what local government—counties, cities, and towns—or territories or tribes will face. That’s fire departments and police and teachers and, really, the backbone of communities across the country all in jeopardy.

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States have to balance their budgets every year. They’re not going to be able to tax their way to solvency this year, when so many people are unemployed. On top of that, public health systems are demanding more than ever in this crisis. What Congress has done so far is a Band-Aid, something like $65 billion among all the states.

The Treasury Department has said that some of the aid that’s been appropriate under the CARES Act, passed in March, could cover payroll costs for public safety and health workers, but that will amount to probably no more than $100 billion in assistance. There’s about $75 billion, collectively, among the states’ rainy day funds—for the states that do have them. Some hard-hit states don’t have them at all.

The House HEROES Act has about $1 trillion in aid to states and localities, enough to keep the states, tribes and territories, as well as the counties and cities and towns, afloat. These are absolutely essential employees in so many communities, not just because they’re providing public safety and education, but because they are such a huge part of the workforce in many of them, particularly smaller towns. They keep the economy going in so many places.

That includes a lot of rural states which are right now being disastrously represented by Republicans in the Senate. The rural states are starting to bear the brunt of the pandemic.

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