Governors call on Congress to allocate $500B for states to make up budget shortfalls

The National Governors Association (NGA) is calling on Congress to allocate $500 billion to help states make up budget deficits that have resulted from the fight against the coronavirus.

Maryland Gov. Larry Hogan (R) and New York Gov. Andrew Cuomo (D), the NGA chair and vice chair, respectively, said in a joint statement that governors are taking the lead in fighting the COVID-19 pandemic but have seen their state budgets crater as they divert resources to curbing the virus’s spread.

“Despite this grave challenge, the recently passed federal CARES Act contained zero funding to offset these drastic state revenue shortfalls,” they said, referring to the recently-passed $2.2 trillion relief package. “To stabilize state budgets and to make sure states have the resources to battle the virus and provide the services the American people rely on, Congress must provide immediate fiscal assistance directly to all states.

“Congress must appropriate an additional $500 billion specifically for all states and territories to meet the states’ budgetary shortfalls that have resulted from this unprecedented public health crisis,” they continued. “This critical stabilization funding for states must be separate from much-needed fiscal stabilization for local governments.”

The statement comes as the Senate wages a partisan battle over the next round of coronavirus relief. The chamber this week blocked dueling plans to provide additional funds to help small businesses grapple with the burgeoning coronavirus crisis.

Republicans, led by Senate Majority Leader Mitch McConnell (Ky.), tried to pass an additional $250 billion for the Paycheck Protection Program, which provides loans and grants to small businesses with less than 500 employees. Democrats blocked that measure and tried to pass their own plan, which would also include $100 billion for hospitals and $150 billion for state and local governments and an expansion of food assistance, as well as the small business funding.

Governors across the country have doled out chunks of state funding to fight COVID-19 but have been consistently sounding the alarm over their states’ shortages of crucial tools like masks and ventilators, urging more assistance from the federal government to be better prepared to blunt the virus’s spread. 

The governors suggested that even the $150 billion for state and local governments in the Democrats’ plan would fall short, saying they would need to cut services with anything under $500 billion. 

“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery, and – in turn – our collective effort to get people back to work,” said Hogan and Cuomo.