A bipartisan consensus is building for Congress to pass additional emergency funds for states to help fight the pandemic, maintain health care for low-income families and seniors, and protect public-sector jobs like teachers and firefighters.
As the House, Senate, and president continue to negotiate the specifics of the next coronavirus relief package, it is critical that emergency funding is adequate to address the current crisis. If Congress does too little, families and communities will likely pay a steep price.
Emergency funds are sorely needed as states face revenue shortfalls that jeopardize jobs and essential services. The public health emergency has brought additional costs to states, such as the cost of COVID-19 testing, assistance for workers who lost jobs, and other responses to the pandemic. At the same time, it forced a slowdown of economic activity, which resulted in a loss of revenue needed to pay for those urgent needs.
Maine faces a revenue shortfall next year of at least $1.2 billion, or roughly 30 percent of budgeted revenues. Faced with a crisis, many families would choose to take on debt to weather the storm. But states aren’t allowed to run a deficit. The federal government can, which is why Congress has a responsibility toward states, communities, and families.
Latest Senate bill doesn’t go far enough to protect families and communities
The bipartisan National Governors Association says states need at least $500 billion of dedicated emergency funds in the next coronavirus relief package to protect jobs, continue essential services, and keep money flowing through communities and the economy. The NGA is also advocating an increase in federal matching funds for Medicaid, to help states cover health care costs for sick people and displaced workers.
Last week, the House passed the HEROES Act — a proportionate response to the pandemic crisis that met the benchmarks set by the NGA. The Act would provide $1 trillion in emergency funds for states, municipalities, and tribal governments.
The HEROES Act meet’s the NGA’s minimum benchmark of $500 billion for states. It also includes $375 billion for local governments, and $20 billion for tribal governments. In Maine, it would provide an estimated $3.4 billion in emergency state funds over two years and an additional $1.7 billion for municipalities. Crucially, the plan also brings needed flexibility to the first round of emergency funding enacted by Congress in March.
Senate Majority Leader Mitch McConnell and other Senate GOP leaders have declared the HEROES Act “dead on arrival” in the Republican-controlled Senate.
While the Senate has not yet scheduled a vote on the HEROES Act, a bipartisan group of senators — including Maine Sen. Susan Collins — have released their own plan to provide emergency funding to states. While the plan, known as the SMART Act, is a step in the right direction, it falls short of the need identified by the nation’s governors and of what the data show is needed.
The SMART Act includes $500 billion in emergency funding, but splits those funds between states, counties, municipalities, and tribal governments. It would provide $321 billion to states, $161 billion split evenly between towns and counties, and $18 billion to tribal governments. The SMART Act would provide an additional $1.33 billion in state fiscal relief to Maine over two years and another $666 million to counties and cities in the state.
It’s encouraging that a bipartisan consensus is emerging in the Senate, with members of both parties recognizing the need to shore up revenues in the states. But by splitting needed emergency funds, the SMART Act all but ensures that shortfalls will persist at every level, jeopardizing the pandemic response and prolonging the recession.
Mainers can’t afford for Congress to miss the mark
Maine needs more emergency funding to power its economic recovery and to make sure families and communities can rebound quickly from the public health crisis and recession.
One in six Maine workers is employed in the public sector. Those emergency funds will keep teachers, firefighters and other public-sector workers employed and able to keep up with basic spending. They will keep public transit and hospitals running, and ensure money continues to flow to Maine’s small businesses.
If Congress does not act boldly enough to address the full scope of the crisis, it could force layoffs and cuts to services that will reduce the flow of money through our communities and make the recession last longer. The Senate’s next relief package must meet at least the minimum benchmarks set by the NGA to address the public health crisis and power our economic recovery.
