States drawing up big wish lists for relief money
State governments will get a big influx of federal money from the $1.9 trillion COVID-19 relief package that could suddenly enable them to undertake large, expensive projects that have long been on their to-do lists, including high-speed internet for rural areas and drinking water improvements.
The aid plan, approved by Congress in close partyline votes and signed by President Joe Biden on Thursday, includes $195 billion for states, plus separate funds for local governments and schools.
While the package contains considerable shortterm financial relief for businesses and individuals who have suffered from the outbreak, its Democratic supporters also see it as a rich opportunity to help states attack poverty more broadly and accomplish the kind of big things government used to do.
Since most state budgets are not in the tailspins that many feared last spring, states can use their share of the money to go way beyond balancing the books and dealing with the direct costs of the coronavirus pandemic.
“There are no words to describe the impact that has on a state that has long had extreme and persistent poverty,” said New Mexico Gov. Michelle Lujan Grisham, a Democrat. “This is exactly the investment that we have always deserved and that we need now more than ever.”
Even Republican governors who have argued against the plan are drawing up ambitious plans similar to what’s on the wish lists of Democratic lawmakers and governors.
In Democrat-controlled California, GOPheld Idaho, and Vermont, with a Republican governor and Democratic legislative majority, priorities include drinking water and rural broadband projects.
In New Mexico, officials expect to use $600 million to pay off debts to the state’s unemployment fund — a move that would prevent a spike in payroll taxes for businesses — and still have more than $1 billion for projects such as economic development grants, road improvements and others still to be determined.
While the behemoth CARES Act adopted last March included $150 billion for state, local and tribal governments, that help was restricted mostly to direct pandemic-related costs. The new package gives states much more flexibility.
Republican governors are arguing that the economy is already in recovery and that all the spending will eventually need to be repaid by the taxpayers.
They also object to a formula that distributes more money per capita to states with higher unemployment rates, which they see as penalizing them for keeping more of their economies open through the pandemic.