Washington – Congress has approved $150 billion already and there’s a bitter political fight over providing much, much more financial relief for state and local governments, but Bethel First Selectman Matt Knickerbocker has not seen a dime.
Neither have any other Connecticut municipal leaders, who say they are burdened by unexpected pandemic-related expenses while their revenues shrink.
“Even though the rest of the world is hunkering down, all of the municipal services continue,” Knickerbocker said.
For instance, he said, his town has had to pay for laptops so town employees can work remotely. It has also spent thousands of dollars for protective gear for firefighters, police officers and others.
Meanwhile, Knickerbocker said, he’s about $1 million behind in revenue collection as the pandemic and the governor’s executive orders granting tax relief to residents slow payments of real estate and personal property taxes. Knickerbocker also said the coronavirus shutdown has eliminated needed revenue from park and recreation fees.
In approving $150 billion for state and local governments in the massive CARES Act last month, Congress expected to help communities like Bethel, a town of about 19,500 people. But the first selectman said “it’s been a real challenge figuring out when and if we’re going to get anything.”
Connecticut’s allocation of the Coronavirus Relief Fund was $1.4 billion. The state is required to use the money to pay allowable expenses incurred by cities and towns with populations of fewer than 500,000 residents. That’s all 169 Connecticut cities and towns. Larger municipalities can apply directly to the U.S. Treasury for aid
The U.S. Treasury has released at least half of the money in the fund, but Connecticut and other states — as well as towns like Bethel — are thwarted by the strings attached to the federal help.
Federal regulations say the money can only be spent on “necessary expenditures” incurred after March 1 that were not accounted for by state and local governments as of March 27, the date the CARES Act was enacted. And the money cannot be used to make up for lost revenues.
The National Governors Association has taken a lead in a fight to would give states and local governments more flexibility in the use of those stimulus funds. It insists $500 billion more is needed to help state and local governments balance their budgets.
The Connecticut Conference of Municipalities has joined the NGA’s effort, and is pressing for a ruling that much smaller towns — those with more than 50,000 residents — be able to apply directly to the U.S. Treasury for aid and not have to go hat-in-hand to the governor’s office.
“There has been progress made in gaining support for additional direct funding for states, as well as critical support for direct funding for municipalities with populations in excess of 50,000,” said Joe DeLong, CCM Executive Director. “We are continuing to push for direct funding for all local governments.”
Besides pushing for more money for the nation’s cities and states, DeLong said he is also “continuing to urge Governor Lamont to share a portion of the $1.38 billion in revenues received from the Coronavirus Relief Fund.”
The governor’s office did not respond to questions about sharing the stimulus money.
A partisan turn
Meanwhile, the fight over more money for state and local governments has taken a decidedly partisan turn in Washington D.C.
Republicans say the state and local governments do not need the money – especially for those “blue” states they say misuse resources on generous social services and employee pensions.
On Wednesday, the top Republican on the House Ways and Means Committee, Rep. Kevin Brady of Texas, said Congress has already given more than $700 billion to state and local governments, when federal unemployment money, pandemic education aid, money to local hospitals and other new federal stimulus programs is added up.
But Democrats insist billions more dollars must be added to the Coronavirus Relief Fund in the next stimulus bill.
Sen. Chris Murphy, D-Conn., this week mocked “red” state lawmakers like Sens. Mitch McConnell, R-Ky. and Rick Scott, R-Fla. and Florida Gov. Ron DeSantis for saying states like New York, Connecticut and New Jersey do not need or deserve any more federal aid.
“Kentucky gets $45 BILLION more in federal funding than they pay in taxes. New York pays $21 BILLION more in taxes than they get from the feds,” Murphy tweeted. “ So effectively every year NY writes a $21B check to KY. But helping pay for pandemic response is a blue state bailout. Got it.”
McConnell last week said the law should be changed to allow states like Connecticut and Illinois to apply for bankruptcy. But the Senate Majority Leader softened his tone on Wednesday.
He said he is “open” to considering additional funds for state and local governments in the next coronavirus relief bill. But he’s likely to insist on a condition – that the next package must also include federal liability protections from what he warned will be an “avalanche” of lawsuits against businesses that reopen during the pandemic.
Several Democrats have opposed this liability shield, saying taxpayers would unfairly bail out businesses in “red” states that reopen before it’s safe to do so.