Aid needed for state, local governments during pandemic recovery

July 1, 2020

CUNA joined the National Governors Association and dozens of other organizations this week to write to Senate leadership to call for “more robust and direct stimulus” for state and local governments to rebuild the economy and maintain essential services.

“Previous federal bills responding to COVID-19 provided important support, many through well-established grant programs, yet none allow for the replacement of billions of lost revenue due to COVID-19,” the letter reads. “More robust and direct stimulus is needed for state and local governments to both rebuild the economy and maintain essential services in education, health care, emergency operations, public safety and more.”

The organizations note that, as the end of the budget year gets closer, looming furloughs and job losses for states and localities will affect those budgets, in addition to the impact if those entities are no longer purchasing goods and services.

The Congressional Budget Office has found that state and local governments’ purchases of goods and services fell by $350 billion in the 2020 and 2021 Gross Domestic Product (GDP) analysis, making up 9% of the total projected GDP decline.

“The damage will get far worse without federal assistance, forcing drastic cuts that will further delay and cancel infrastructure projects, as at least 26 states have announced construction delays for transportation projects,” the letter reads. “The loss of such projects will ripple through states’ construction industry, delaying recovery further.”

The organizations also note that while leaders in Washington have expressed support for flexible fiscal aid to states and localities of all sizes, no funding proposals have yet emerged.

The organizations’ effort was also noted by Beltway news outlet Politico in a newsletter to lawmakers, Tuesday.