In a letter sent to Congressional leaders on Monday, the governors and top lawmakers of Oregon, California, Washington, Nevada and Colorado argue that trillions of dollars in existing federal aid will not sufficiently protect their economies.
“We deeply appreciated the quick financial assistance you provided workers, small business people and those who have been displaced by this crisis,” the letter reads.
“But now, however, our states will be forced to make deep cuts to programs that help those same individuals without similar relief efforts for state and local governments. Even states that began the year in a strong fiscal position are facing staggering deficits amid growing costs of responding to the crisis.”
Services that might face cuts as states work to battle the health crisis, officials say, include: education, police departments and firefighters. “And, without additional assistance, the very programs that will help people get back to work – like job training and help for small business owners – will be forced up on the chopping block,” the letter reads.
The document was signed by Oregon Gov. Kate Brown, House Speaker Tina Kotek, and Senate President Peter Courtney, along with equivalent officials in the other states.
The request for “direct and flexible relief to state and local governments” echoes a concern that state leaders around the country have voiced in the wake of the $2 trillion CARES Act that Congress passed in March.
That law offered sizable relief to states, including more than $1.6 billion to Oregon in the act’s “coronavirus relief fund,” but state leaders are hamstrung in their ability to spend the money. Under federal rules, the aid could not be spent to fund state priorities that are no longer affordable amid cratering tax revenues. Instead, the money has to be spent on new costs created by the spread of COVID-19.
“We cannot use that to backfill the revenue that we have lost because I shuttered the economy to stop the spread of the disease,” Brown said April 14. “That is a frustration I would say is shared by governors around the country.”
Brown has lately been criticized for not sharing more of the state’s federal aid with cities and counties. Mayors, county leaders and even Congressman Greg Walden have called on the governor to release millions to help localities address increased needs like rental assistance and small business help.
The Congressional request is the latest sign of unity by states participating in the “ Western States Pact,” a regional group of Democratically-led states that have pledged to work together and share information as they take steps toward reopening shuttered economies.
And the letter clearly has at least some sympathy in Washington, D.C. House Democrats are drafting a new relief bill that reportedly includes up to $1 trillion in aid to states. It’s not clear whether the Republican-led Senate would agree to such a proposal.
Oregon budget officials say anticipated revenue in the current two-year budget could drop by as much as $3 billion due to the virus.
As OPB first reported, Brown last month directed state agencies to create proposals for what amounts to a 17% cut in their general fund budgets in the upcoming fiscal year. Those proposals were due last week, and the governor’s office has so far declined to make them public.
Brown’s staff has described the proposals as a “planning exercise” more than an accurate look at impending budget cuts.
“We haven’t made any final decisions, and the agency plans serve as important information gathering at this point,” Brown said in a statement issued Monday. “We know a potential cut of this magnitude would be extremely drastic.”
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