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Bipartisan, Bicameral Legislation Promises New Aid to State, Local Governments

May 19, 2020 by Dan McCue
Rep. Josh Gottheimer

WASHINGTON – A bipartisan, bicameral effort is underway to provide hundreds of billions in funding to state and local governments reeling from the budgetary hit they’ve taken due to the coronavirus outbreak.

The House bill introduced Monday by Reps. Josh Gottheimer, D-N.J., Mikie Sherrill, D-N.J., and Peter King, R-N.Y. would provide $500 billion in emergency funding, in addition to the $150 billion passed by Congress in March.

“I’m fighting to get federal resources back to each county and community in hard-hit North Jersey — the eye of the COVID-19 storm,” Rep. Gottheimer said in a statement.

“We need to get the backs of those on the frontlines of this crisis, including EMS, firefighters, and law enforcement. It’s Congress’ responsibility to help the hardest-hit communities. … This new bipartisan, bicameral bill puts the country first,” he said.

Gottheimer’s fellow New Jerseyite, Rep. Sherrill, agreed, noting that state and local governments in their state have been a critical line of defense in the effort to respond to the pandemic.

“The federal government has a responsibility to help,” Sherill said. “This legislation is an important, bipartisan step toward getting towns, counties, and states the resources they need to keep their residents safe.”

“This legislation is absolutely essential to defeating and crushing the coronavirus pandemic,” Rep. King said. “State and local governments must have the necessary funding support so that the cops, firefighters, health care workers and all first responders can get the job done. Too much is at stake to do otherwise.”

The other co-sponsors in the House are Tom Reed, R-N.Y., Tom O’Halleran, D-Ariz., Fred Upton, R-Mich., Ted Lieu, D-Calif., Brian Fitzpatrick, R-Pa., Debbie Dingell, D-Mich., and Elise Stefanik, R-N.Y.

Sens. Robert Menendez, D-N.J., and Bill Cassidy, R-La., led the introduction of companion legislation in the Senate on Monday, which is also being co-sponsored by Sens. Susan Collins, R-Maine, Joe Manchin, D-W. Va., Cory Booker, D-N.J., and Cindy Hyde-Smith, R-Miss.

Menendez said in a statement that the bill is a “commonsense, reasonable and bipartisan approach our frontline states and communities need to deliver them the necessary flexible funding to defeat COVID-19, maintain critical services, avoid mass layoffs and tax increases, and expedite our economic recovery.”

Meanwhile, Cassidy noted that “[s]tates and local communities shut down when the federal government asked and then lost billions in sales tax and other revenue. 

“These states, communities either lay off workers or they get help. The SMART Act helps. The SMART Act keeps the thin blue line, firefighters and teachers from being casualties of COVID-19. It keeps our communities alive,” the senator said.

Despite the bipartisan support for the proposal, Republican leaders in both the House and Senate a still insisting on a “pause” before any new relief package is considered.

Emerging from a Senate lunch with President Donald Trump Tuesday afternoon, Senate Majority Leader Mitch McConnell said he wants to wait at least a few weeks to evaluate how the first relief bills have been implemented.

House Minority Leader Kevin McCarthy also told CNN’s Manu Raju Tuesday that be did not “see the need right now” for additional stimulus spending.

The State and Municipal Assistance for Recovery and Transition (SMART) Fund will provide $500 billion in emergency funding to every state, county and community in the country, while prioritizing assistance to the areas with the greatest need.

The lawmakers say the additional federal support answers the call of the country’s governors, county officials, and local mayors who have been working around the clock to address the public health and the economic threat of COVID-19.

The bills eliminate the current 500,000 resident population threshold, allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance, regardless of its size.

After a $16 billion set-aside for Native American tribal governments, the remaining funding would be allocated to states through three equally divided tranches:

  • The first tranche of funding will be allocated to all 50 states, D.C. and U.S. territories in proportion to each respective state or territory’s percentage of the U.S. population. Funding will be distributed to counties and municipalities based on each county or municipality’s proportion of the state’s population;
  • The second tranche of funding will be allocated based on each state’s relative share of the nation’s infection rate. States that have disproportionately high infection rates will incur significantly higher expenses and will likely need to continue stay-at-home orders for longer periods of time, leading to larger revenue losses.
  • The third tranche of funding will be allocated based on each state’s revenue loss in proportion to the combined revenue loss of all the states from January 1, 2020 through December 31, 2020.

Under the formula, for example, if a state is awarded $6 billion in SMART funds, $4 billion would go to help stabilize the state government, $1 billion would be split among its counties and the remaining $1 billion dispersed to each of its municipalities based upon the respective criteria in each tranche.

All states, Puerto Rico and the District of Columbia shall receive a minimum of $2 billion combined from the first two tranches in addition to their allocation from the third tranche.

“I thank my colleagues for their willingness to work over the last two months in a bipartisan, bicameral fashion on a solution that properly addresses the magnitude of the economic challenges facing state, county, and municipal governments in this country,” Rep. Reed said.

“Speaking with local leaders every day, and as a former small town mayor myself, I knew it was only fair that this bill protect localities and specifically safeguard the critical federal support they will receive,” Reed said.

Rep. Fitzpatrick, identified in a recent survey as the most bipartisan member of the House, called the SMART Fund “a commonsense proposal to provide much needed assistance to communities across the country.”

Rep. Sherill thanked Sens. Menendez and Cassidy for their “leadership and quick response” to the needs expressed by the nation’s counties and governors.

“I appreciate their partnership, and I’m proud to bring colleagues from both sides of the aisle together to lead on this important piece of legislation,” she said.

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