States Say They Need More Money, But They Haven’t Spent What They’ve Already Been Given

( One of the main features of House Democrats’ version of the next coronavirus economic stimulus package is more funds for state and local governments. Republicans have pushed back on that, and recent data shows they might be right.

A Treasury Department report released this week shows that local and state governments have spent less than 25% of the relief funds they’ve already gotten. As part of the $2 trillion CARES Act Congress passed in the spring, $150 billion was sent to state and local governments to defray any public health costs related to the coronavirus.

They were supposed to use their share of this money from the Coronavirus Relief Fund to help bridge the economic gap they were experiencing due to businesses being shut down. Many of the states are simply holding onto that money, though, instead of putting it to work.

Two states that were hit especially hard by the coronavirus in the spring — Connecticut and New Jersey — have used less than 5% of their portion of the funds.

This comes at a time when states are saying they need a federal bailout that could total in the hundreds of billions of dollars range so they can remain solvent. In fact, the National Governors Association issued a request for $500 billion in stimulus funds from the next bill.

It’s a reason why House Democrats included significant funding for state governments in their version of the next stimulus bill. Democrats have proposed giving $540 billion in bailout funds to state and local governments.

Senate Republicans have been leery of giving states more money, and now they may be even less likely to compromise on that point with this report out.

According to the report, only Colorado, New York and California have even used more than half of their funds. In total, 23 states have used less than 10%, and 11 others have used less than half. South Carolina, which was given $2 billion, has only used $763,000 so far.

Each state received at least $1.25 billion from the CARES Act. How much money each state was allocated was based off population.

The Republicans are pointing to the fact that states haven’t even used their original allocations as a reason why they don’t need more money just yet. Instead, Republicans are proposing that language be removed from the bill that requires states to use that funding only on public health issues.

This could solve states’ problems, as they have claimed that the biggest challenge they face is not how to pay for public health issues, but how to bridge the gap of the massive loss of tax revenue due to business shutdowns.

If the restrictive language were removed, the funding that the states already have in their pockets could be used for whatever purposes they deemed most crucial. It’s the route that many Republicans prefer to take, rather than doling out large sums of money that they don’t feel is necessary.

It’ll be up to the states — and Democrats — to convince them otherwise.