The critical need for state and local funding in the face of the COVID-19 pandemic was obvious in the spring. Even with initial aid, we knew difficult decisions would be ahead for mayors, county commissioners, state legislators and governors. And as we’ve seen cases surge once again, unfortunately, many of our local leaders have had to continue responding to the public health crisis at hand as well as the ongoing economic fallout from this virus.
In Colorado, we now know the many tough decisions made by the state legislature and governor to address the $3 billion shortfall. Many more hard choices are to come for our municipalities, school districts and our state over the coming months and years. In a matter of weeks, the state legislature’s Joint Budget Committee had to cut 25% of current spending, a budget shortfall never seen before in our state, with cuts made to school districts ($577 million), the state’s colleges and universities ($493 million), and reductions in the fund for state employees’ salaries and benefits which could lead to furloughs and hiring freezes ($111 million). The loss in tax revenue and other hits to the budget due to COVID-19 means not only a budget shortfall for this fiscal year but also the next two fiscal years and potentially beyond.
Public sector unemployment numbers across the country tell the same story of essential services being cut and communities hurting. Since March, colleges, school districts and state and local governments have lost approximately 1.5 million jobs with no region of the country spared. While most of these job losses may be declared temporary for now, the longer the public health crisis continues, the more of these job losses can become permanent.
To date, federal relief packages signed into law provided $150 billion in state and local government aid, with only $2.2 billion coming to Colorado which couldn’t stop the drastic cuts to our state budget. We have waited for more than two months for a resolution on the Heroes Act which would provide an additional $1 trillion in aid to state and local governments, including $500 billion in flexible funding for states to respond to the current crisis, replace lost revenue, and support economic recovery. This week, we learn the COVID relief proposal from Senate leadership does not include any new aid and only provides money to schools with plans to fully reopen. That will have dire consequences for many Colorado cities and school districts.
In Thornton, the city is predicting a large financial impact this year which will likely reach well into 2021. Leaders have had to make tough decisions to freeze seasonal hiring which leaves many people without the income they had counted on, also resulting in detrimental impacts to some of the city’s services to residents. Multiple capital improvement projects have had to be deferred, many planned years in advance, that truly affect the quality of life for people in the community. It is circumstances like these that set cities back and make it so difficult to provide for our communities.
Earlier in July, we saw the National Governors Association, Council of State Governments, National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, the International City/County Management Association, and 170 local municipal associations, trade associations, major corporations, labor unions and others join together to implore Congress to provide “robust and direct stimulus” for state and local governments to maintain essential services and rebuild local economies. This also comes as new data shows an overwhelming majority of Americans support at least $1 trillion for state and local governments in the next COVID-19 relief package.
In recent weeks, one of the authors of this op-ed (Congressman Perlmutter) had the opportunity to question both the Federal Reserve Chairman Jerome Powell and the Treasury Secretary Steven Mnuchin about the economy and what they see coming down the pike for state and local assistance. Chairman Powell reiterated the dire situation that lies ahead for state governments. As revenues continue to decline and expenses related to responding to the ongoing public health crisis continue to rise, these big employers will be forced to make cuts leading to job losses and loss of essential services for residents, families and communities who rely on them. Chairman Powell agreed if something is not done to help state and local governments that it could “hold back our economic recovery”. Treasury Secretary Mnuchin also agreed the federal government needs to support our local communities and states which employ first responders, public health workers, teachers and others and this needs to be a part of negotiations in the coming weeks with the Senate.
We’re not out of this thing by any stretch of the imagination, and with cases on the rise we’re not sure what another month will bring. We do know several moratoria on housing foreclosures and evictions are ending, the additional unemployment assistance will cease at the end of July, testing centers are overwhelmed, and all while we see a continuing surge of COVID-19 cases and deaths across the country.
The economic calamity of failing to provide support for our local communities amidst the ongoing COVID-19 crisis is no longer a hypothetical. Refusing aid to state and local governments means refusing to support many of the frontline workers who are keeping our country running during this public health emergency — public health workers, EMS workers, teachers, corrections officers, sanitation workers, custodians, and so many more. This won’t just affect these workers — many of whom are our neighbors, friends and family — but all of us who rely on their critical services.
It’s time for both the Senate and the House to work together to provide desperately needed federal assistance for our communities.
Congressman Ed Perlmutter represents Colorado House District 7 and Jan Kulmann is the mayor of Thornton.
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