Members of Congress Urge House Leadership and Treasury Department to Provide More Funding to State and Local Governments to Address Revenue Shortfalls due to COVID-19
WASHINGTON, DC – Today, Rep. Raja Krishnamoorthi (IL-08) led congressional delegation letters to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, and U.S. Treasury Secretary Steven Mnuchin calling for immediate aid to state, local, tribal, and territorial governments to address surprise revenue shortfalls.
The letters were joined and signed by each Democratic member of the Illinois congressional delegation: Reps. Bobby Rush, Robin Kelly, Dan Lipinski, Jesus "Chuy" Garcia, Mike Quigley, Sean Casten, Danny Davis, Jan Schakowsky, Brad Schneider, Bill Foster, Lauren Underwood, and Cheri Bustos in addition to Rep. Krishnamoorthi.
“State and local balance sheets across the country are dipping into the red as billions of dollars are being lost from unexpected revenue shortfalls,” said Congressman Raja Krishnamoorthi. “The $150 billion provided to state and local governments in the CARES Act was a good start, but more needs to be allocated for places that are hit hardest by the public health and economic impacts of this crisis. This is an issue that is harming the physical and financial health and safety of state and local governments, their employees, and their constituents, and one that must be addressed in our next COVID-19 legislative package.”
Forcing states and cities to accommodate dramatic budget shortfalls, which are exacerbated in part by lost tax revenues due to halting economic activity, could lead to widespread, disruptive reductions in public services, delayed improvement projects, and a slower economic recovery. Below are some examples of cities and states across the country that are expecting revenue shortfalls:
- New York Governor Andrew Cuomo recently predicted a state revenue shortfall of up to $15 billion.
- Ohio Governor Mike DeWine recently told his cabinet members to prepare for up to 20 percent cuts to agencies for the next 15 months.
- Illinois’ Commission on Government Finance and Accountability recently predicted a potential 20 percent decrease in state revenues over the next few fiscal years.
- Cities across the country, from Phoenix to Houston to Philadelphia, are similarly grappling with difficult budget decisions unforeseen just a few short months ago.
In the letters, the undersigned Members of Congress asked that the “State and Local Coronavirus Expenditures Relief Fund” within the CARES Act be expanded to allow state and local governments to replenish lost revenue as a qualifying expenditure, or that Congress authorize the creation of a new fund to provide direct aid to state and local governments with fewer restrictions. They express that either option must allow greater flexibility in how the funds are spent and include robust funding at a level that will meaningfully alleviate the fiscal problems faced by state, local, tribal, and territorial governments across the country.