This article is excerpted from a story by Laura Olson that first appeared on Colorado Newsline on November 20, 2020.
The number of coronavirus infections across the country is swelling at a perilous time for state governments, just weeks before federal support, rushed through Congress in the pandemic’s early stages, is set to end.
The expiring provisions from the $2 trillion CARES Act and subsequent executive orders will mean reductions in unemployment benefits for those struggling to find work, the loss of eviction protections, and a restart to monthly student loan bills that had been suspended.
Those changes heading into the darkest months of winter will not only hit hard at vulnerable Americans. They’ll increase the fiscal strain on state governments, which are facing a deadline to spend any remaining federal dollars received for pandemic-related costs — or send that money back to Washington. And the critical moment is coming at a time when a new president has been elected, the current president is refusing to concede and Congress is unable to muster the consensus to take action.
“It really is becoming a problem, in that I think the people in the White House are focused on fighting elections and the people in the Biden administration don’t have any information and haven’t taken over, and there’s a little bit of a vacuum right now,” Maryland Governor Larry Hogan, a Republican, said during a recent news conference.
Hogan added that he still just sees “bickering” from those in Congress: “The states are out here fighting probably the worst part of the crisis we’ve ever had to deal with, and we don’t really know what’s going on at the federal level.”
Despite calls for a new infusion of federal relief, any additional COVID-19 aid appears unlikely until President-elect Joe Biden takes office. Top congressional leaders and the Trump administration held on-again, off-again negotiations over a new coronavirus relief package before the November election, but those talks have not resumed since Election Day.
Lawmakers are now on recess for the Thanksgiving holidays. They will return for the lame-duck session — the period between an election and when the newly elected lawmakers take office — to consider government funding legislation needed to avert a shutdown after December 11.
That has left states on their own to deal with the looming consequences as COVID-19 infections nationally exceed 11 million and more than 250,000 deaths in the U.S.
With help from Washington lacking, states are attempting their own solutions. The Colorado General Assembly will convene starting November 30 for a special session to enact COVID relief.
“We are living in a moment of unprecedented urgency,” Polis said in a statement announcing details of the special session. “We will act to support our small businesses who face challenging months ahead, provide relief to hardworking people, support child care, and improve broadband access for students and educators.”
Cumulatively, state, local, territorial and tribal governments are projected to face a budget shortfall between $275 billion and $415 billion, according to the Center on Budget and Policy Priorities, and that’s if elected officials drain any remaining fiscal reserves.
Already, states and localities have furloughed or laid off 1.2 million workers to date, based on CBPP data.
In a recent letter to congressional leaders urging more financial help to states, Minnesota Governor Tim Walz wrote that in February, his state was projecting a budget surplus of $1.5 billion. That expected surplus quickly crumbled to a $2.3 billion projected deficit for the fiscal year ending in June. Now there’s a yawning $4.7 billion shortfall anticipated for the following two-year budget.
The CARES Act approved last spring included a $150 billion relief fund for state and local governments. Those dollars came with specific requirements on how they must be spent, and a deadline of spending the money by December 30 even though “we know the virus is not going away by the end of the year,” Walz wrote.
“To the contrary, at the rate of increase we are seeing in the current surge, it is going to get much worse before it gets better,” he wrote. “And yet states will be left with no additional federal resources to combat the rising tide of infections, unemployment, and human services needs that will continue long after the funds from the CARES Act expire.”
Minnesota has nearly exhausted those dollars, as have most states across the country.
Among 42 states and territories surveyed by the National Governors Association last month, 89% of the federal coronavirus relief dollars had been allocated. The NGA had unsuccessfully urged this summer for another round of relief to states of $500 billion.
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