Facing severe budget crunches of their own, cities want states to give them a larger slice of the coronavirus relief aid approved by Congress in late March.
The National League of Cities compiled a report listing 32 states that are “withholding funding from most municipal governments, including all small and rural municipalities, with no indication when, or if, funds will ever be made available.” The states include California, Florida, Georgia, Michigan, New York and South Carolina.
The report was distributed to senators over the past day and will be sent to all members of Congress to help make the case that cities need more direct federal assistance, the league said. Lawmakers have been asking how the $150 billion they already provided to states and localities is being used.
“States don’t know if there is going to be additional dollars coming out of the federal government, so that’s causing them to be hesitant to distribute all of these dollars at this time,” said Clarence Anthony, the league’s executive director. “They have to hold on and make sure as they go through this that they’re able to also take care of those state budget shortfalls.”
The coronavirus has blown major holes in many state and local budgets as tax revenues plunge amid widespread layoffs and stay-at-home orders, which are slowly starting to lift.
Congress allocated $150 billion to help states and large municipalities cover coronavirus-related expenses as part of a $2 trillion relief package, known as the CARES Act. But only 36 municipalities meet the criteria of having more than 500,000 residents, according to the league.
While states are not required to pass down the funds, the Treasury Department issued guidance earlier this month clarifying that they can do so. Two states are sending money to county governments and 16 states are allowing municipalities to apply for funds, the league said.
“If cities are going to help restart America’s economy, we need those dollars and we need them now,” Anthony said, adding he’s hopeful more states will distribute the funds to localities.
Both Anthony and the National Governors Association said state and local governments are working together to petition Congress to give them more assistance and allow them to use the money to plug budget gaps, not just cover the costs of fighting the virus.
“We are united with our partners in city and county government in calling on Congress to approve much-needed relief in the form of direct funding to state, city and county governments so that they can continue to provide the services that Americans rely upon,” said James Nash, a spokesman for the association.
The House last week approved a massive package that would send $500 billion to states and $375 billion to localities, but Senate Republicans have said it’s dead on arrival.