As states, localities face fiscal squeeze, budget hardliners say no to “bailout”
Groups representing elected officials at every level of government are pleading with Congress to provide more aid to cash-strapped states and counties, warning that crucial services will be imperiled and layoffs will be impossible to avoid if Washington fails to push more cash out the door.
Among those leading the call for federal action is Gov. Lawrence J. Hogan Jr. (R), whose tenure as head of the National Governors Association ended Wednesday.
He warned again last week that state and local governments will be in “real trouble” soon if Congress and the White House don’t reach agreement on another coronavirus aid package. And he accused the White House and Senate Republicans of “backtracking” from a pledge to provide $500 billion in additional assistance.
But some of the loudest voices against another helping of state and local aid are coming from Hogan’s fellow Republicans.
The American Legislative Exchange Council is urging the Trump administration and congressional leaders to reject requests for more emergency funding.
In a July 28 letter to “The Federal Government and Leaders in Washington DC,” 300 state lawmakers and other anti-tax activists said providing additional federal assistance would represent a taxpayer-funded “bailout” of states that haven’t managed their fiscal affairs properly.
The letter was signed by several Republican members of the Maryland General Assembly — Sens. Michael J. Hough (Frederick and Carroll) and Andrew A. Serafini (Washington) and Dels. Kathryn Szeliga (Baltimore and Harford), Daniel L. Cox (Frederick and Carroll), Susan W. Krebs (Carroll) and Trent Kittleman (Howard and Carroll).
“We feel a federal bailout of state budgets would be counterproductive – rewarding states that have made poor financial decisions at the expense of those that have been fiscally responsible,” the lawmakers and activists wrote.
The pushback from ALEC, a prominent Northern Virginia-based conservative think tank, is part of an effort by fiscal hawks to raise concern about the growing federal debt, which has ballooned to more than $24 trillion.
The White House and congressional leaders have been negotiating on an aid package that could include additional state and local aid, an extension of the $600-per-week in supplemental jobless benefits that began early in the pandemic, and an easing of restrictions in how prior federal aid can be used.
In a joint letter, the executive directors of the “Big 7” — the NGA, the National Association of Counties, the National League of Cities, the International City/County Management Association, the National Conference of State Legislatures, The Council of State Governments and The United States Conference of Mayors — said federal efforts to date have been “insufficient.”
“The CARES Act passed in March allocated only a small fraction of what is needed to address unemployment, cancellation of job-creating infrastructure projects, education and health challenges, and interruption of local services,” they wrote.
“The funding made available for state and local governments thus far is insufficient, particularly as areas across the country continue to experience alarming coronavirus case surges that further strain state and local resources. As a nation, we can and must do better…”
Last week Hogan said 1.6 million state and local workers have lost their jobs because of the coronavirus epidemic — and that more layoffs are certain if Congress doesn’t act.
“We’re going to be really impacted and have to make very tough fiscal decisions in the states about how do we provide more services to more people who are really in need, with a lot less revenue,” he said during a Q&A with the Reagan Library on the first day of his book tour.
In addition to the GOP lawmakers, the ALEC letter was signed by dozens of Americans for Prosperity state directors, Tea Party Patriots leaders and organizations representing taxpayers.
Del. Barrie S. Ciliberti (R-Frederick and Carroll) was not among the signers –– but he is in agreement with his colleagues who did.
“We’ve bailed out enough,” he said in an interview. “Every time a state gets in trouble they should not be turning to the federal government.”
Ciliberti said states, cities and counties that are struggling need to do a better job of prioritizing. “You can’t continue to go to the public trough.”
Hogan has pushed back vigorously against the GOP “bailout” claims for months, calling them “complete nonsense.”
“These are well-run states,” he told Axios. “There are just as many Republicans as Democrats that strongly support this.”
Hogan added: ”I’m hopeful that we’re going to be able to — between the administration and the 55 governors in America, including the territories — we’re going to convince [Senate Majority Leader Mitch] McConnell that maybe he shouldn’t let all the states go bankrupt.”