Economic Policy Institute: More Than 180 Groups Sign on Letter Urging U.S. House, Senate Leadership to Pass $500 Billion in Unrestricted Aid to States, Territories, Local Governments

WASHINGTON, April 14 -- The Economic Policy Institute issued the following news release:

Over 180 organizations across the United States, including the Economic Policy Institute, signed a letter to U.S. House and Senate leadership urging them to quickly pass $500 billion in unrestricted aid to states, territories, and local governments. While the first three federal bills included vital resources for the important work of state, territorial, and local governments, the amount of aid allocated to date falls far short of what is needed to hold state, territorial, and local budgets harmless against the enormity of the crisis.

As economic activity has collapsed, it has triggered a dramatic downturn in state, territorial, and local revenues--even apart from new spending demands imposed by the coronavirus. Unlike the federal government, most state governments are required by statute or constitution to balance their budgets. As revenues decline because of lower incomes and reduced spending, state, territorial, and local governments face serious fiscal constraints, often leading to budget cuts that further depress demand in the economy.

"Already, states, territories, and localities have announced austerity measures and severe budget shortfalls exactly when public spending is most critical--both for protecting workers and priming the economy for a rapid bounceback when the shutdown ends," said Naomi Walker, Director of the Economic Analysis and Research Network, a national network of more than 60 state-level policy research and advocacy organizations coordinated by EPI. "We need Congress to step up for working people across the country to make sure that governments are prepared to handle the current economic and health crisis."

In addition, the letter urges Congress to:

* Adopt the payroll guarantee model nations like Denmark and the United Kingdom have implemented to "deep freeze" local economies and protect workers and businesses during an economic shutdown.

* Make additional investments in unemployment insurance (UI) by including triggers that allow both the $600 per week in Pandemic Unemployment Compensation and expanded eligibility to phase out only when economic conditions warrant rather than on an arbitrary timeline, as well as expanded eligibility for Pandemic Unemployment Assistance to immigrant workers left out of UI and new labor market entrants.

* Disburse another direct cash payment and make it available to all households regardless of tax filing or immigration status.

* Provide full funding for testing, treatment, and front-line workers' personal protective equipment.

* Include strong worker protections.

* * *

Letter to Congress urging $500 billion in relief funds for state, local, territorial, and tribal governments and other transformative investments

April 13, 2020

To: The Honorable Mitch McConnell, Senate Majority Leader; The Honorable Charles Schumer, Senate Democratic Leader; The Honorable Mike Enzi, Chair, Committee on the Budget; The Honorable Bernie Sanders, Ranking Member, Committee on the Budget; The Honorable Richard Shelby, Chair, Committee on Appropriations; The Honorable Patrick Leahy, Vice Chair, Committee on Appropriations; The Honorable Charles Grassley, Chair, Finance Committee; The Honorable Ron Wyden, Ranking Member, Finance Committee, United States Senate, Washington, D.C. 20510; The Honorable Nancy Pelosi, Speaker of the House of Representatives; The Honorable Kevin McCarthy, House Republican Leader; The Honorable John Yarmuth, Chair, Committee on the Budget; The Honorable Steve Womack, Ranking Member, Committee on the Budget; The Honorable Nita Lowey, Chair, Committee on Appropriations; The Honorable Kay Granger, Ranking Member, Committee on Appropriations; The Honorable Richard Neal, Chair, Committee on Ways and Means; The Honorable Kevin Brady, Ranking Member, Committee on Ways and Means, United States House of Representatives; Washington, D.C. 20515

Dear Members of Congress:

We, the undersigned organizations and state and local elected officials, urge you to include $500 billion in funding for state, local, territorial, and tribal governments in the next federal coronavirus relief bill. While the first three bills included vital resources, the amount of aid allocated to date falls far short of what is needed to hold state, local, territorial, and tribal budgets harmless against the enormity of the crisis.

As economic activity has collapsed, it has triggered a dramatic downturn in state, local, territorial, and tribal revenues even apart from new spending demands imposed by the coronavirus. Unlike the federal government, most state governments are required by statute or constitution to balance their budgets. As revenues decline because of lower incomes and reduced spending, state and local governments face serious fiscal constraints, often leading to budget cuts that further depress demand in the economy.

Already, states and localities are announcing austerity measures and severe budget shortfalls exactly when public spending is most critical--for both protecting workers and priming the economy for a rapid bounceback when the shutdown ends. Ohio Governor Mike DeWine has proposed an across-the-board 20% budget cut; New York State Comptroller Thomas DiNapoli estimated tax revenue would be between $4 billion and $7 billion below projections for fiscal year 2020; the projected revenue decline for Arkansas is more than double the size of the state's reserves; and California is projected to spend down its sizeable cash reserves in mere months, despite previously being on track to build the largest cash reserve in its history--of more than $20 billion. Local governments are announcing severe revenue shortfalls, too. This week, Arlington County, Virginia, announced a shortfall of $56 million for FY 2021, and cities such as Seattle and New Orleans are each projecting shortfalls of at least $100 million this year.

When the economy is ready to restart, these budget shortfalls will lead to large drags on the recovery if Congress does not act quickly. During the Great Recession, such budget gaps and the resulting cuts severely hampered the economic recovery. Congress should authorize at least $500 billion by the end of 2021 to avoid this economic drag.

In addition to providing $500 billion for state, local, territorial, and tribal aid, we urge you to:

Adopt a transformative approach by following the payroll guarantee model nations like the United Kingdom, Denmark, and the Netherlands have implemented, with the national government paying up to 90% of all payroll costs for employers affected by the public health shutdowns. These plans create an economic "deep freeze," in which large swaths of the economy shut down, but workers and businesses are held as near harmless as possible.

Make additional investments in unemployment insurance (UI) by including triggers that allow both the additional $600 per week through the Federal Pandemic Unemployment Compensation (FPUC) program and expanded eligibility to phase out slowly and only as economic conditions warrant. The Goldman Sachs macroeconomic forecasting team estimates that the national unemployment rate will average 14.7% in June, July, and August of 2020, and that unemployment in the first 3 months of 2021--after the expanded criteria for unemployment benefits expire--will average 8.0%, or well over double the unemployment average in the first three months of 2020.

In addition, the Pandemic Unemployment Assistance (PUA) eligibility expansions still leave some workers falling through the cracks. This should be fixed by expanding eligibility to immigrant workers left out of UI and to new labor market entrants unable to find work. Finally, new money is needed to help states quickly build up their UI system administrative capacity to ensure the effective delivery of UI benefits.

Disburse another direct cash payment: Even with expanded PUA, some households facing economic distress due to the coronavirus shock may fall through the cracks, and recovery may be delayed if households feel insecure about their financial situation. The $1,200 cash payment included in the CARES Act is insufficient to carry all households through the relief period unscathed and to ensure a robust recovery once the all-clear sounds. Further, the cash payment provision is too restrictive about which households are eligible to receive the payment. Another direct cash payment should be provided, and it should be available to all income-eligible households regardless of tax filing or immigration status.

Provide full funding for testing, treatment, and frontline worker personal protective equipment (PPE): While substantial money for medical investments has been allocated in previous relief and recovery bills, an open-ended commitment by the federal government to fully fund any testing and treatment of coronavirus expenses should be made. A similar commitment should be made to purchase and disburse PPE to frontline workers (including but not limited to health care workers).

Include strong worker protections: This crisis has revealed the lack of power far too many U.S. workers experience in the workplace. Many workers are being required to work without protective equipment. They have no effective right to refuse dangerous assignments and are not even being granted hazard pay, despite working in difficult and dangerous conditions. Policymakers must include enhanced protections for all workers performing essential work during this crisis.

Sincerely,

100 Black Men of America, Inc.

ACCESS

ACLU of Kentucky

Action NC

Adelante Alabama Worker Center

AFL-CIO

Alabama Arise

American Family Voices

American Federation of Teachers

Americans for Democratic Action

Americans for Democratic Action, Southeastern Pennsylvania Chapter

Arizona Center for Economic Progress

Arkansas Advocates for Children and Families

Arkansas Community Organizations

Asian Pacific American Network of Oregon

Atlanta Jobs with Justice

Battle Born Progress

Ben Chipman, State Senator, Maine

Better Pennsylvania

Big Brothers Big Sisters of Metro Atlanta

Big Sky 55+

Billy Mitchell, State Representative, Georgia

Black Women Rising

Campaign for America's Future

Causa Oregon

Center for Disability Rights

Center for Law and Social Policy (CLASP)

Center for New York City Affairs

Center for Popular Democracy

Center for Public Policy Priorities

Center on Policy Initiatives

Citizen Action Illinois

Citizen Action of New York

Citizen Action of Wisconsin

Coalition on Human Needs

Colorado Center on Law and Policy

Colorado Consumer Health Initiative

Colorado Fiscal Institute

Colorado Organization for Latina Opportunity and Reproductive Rights

Connecticut Citizen Action Group

Connecticut Voices for Children

Connecticut Women's Education and Legal Fund (CWEALF)

Consumers for Affordable Health Care

DC Fiscal Policy Institute

Dr. George E. Young, State Senator, Oklahoma

Economic Opportunity Institute

Economic Policy Institute

Economic Progress Institute

Eric Luedtke, House Majority Leader, Maryland

Fair Share Connecticut

Faith in Indiana

Faith in Public Life

Federation of Protestant Welfare Agencies (FPWA)

Fiscal Policy institute

Florida Institute on Research and Education

Florida Policy Institute

Frank Hornstein, State Representative, Minnesota

Georgia Budget and Policy Institute

Georgia Coalition for the People's Agenda

Georgia Legislative Black Caucus

Georgia NAACP

Georgia Stand-Up

Georgians for a Healthy Future

Good Jobs First

Granite State Organizing Project

HANA Center

Hawaii Appleseed Center for Law & Economic Justice

Health Access California

Health Care for America Now

Henry Beck, State Treasurer, Maine

Hillman Frazier, State Senator, Mississippi

Homeless and Housing Coalition of Kentucky

Hoosier Action

Howard Watts III, Assembly Member, Nevada

In the Public Interest

Indiana Institute for Working Families

Institute for Women's Policy Research

Institute on Taxation and Economic Policy

International Congress on Faith & Justice

Iowa Citizen Action Network

Iowa Policy Project

Jackie Traynere, County Board Member, Will County, Illinois

Jobs to Move America

Kaye Kory, Delegate, Virginia

Kentucky Center for Economic Policy

Kentucky Council of Churches

Kentucky Mental Health Coalition

Kentucky Voices for Health

Keystone Research Center

Kids Forward

Labor Resource Center, UMass Boston

Legal Aid at Work

Legal Aid Justice Center

Lisa A. Cutter, State Representative, Colorado

Local Progress

Los Angeles Alliance for a New Economy

Louisiana Budget Project

Main Street Alliance

Maine AFL-CIO

Maine Center for Economic Policy

Maine Equal Justice

Maine People's Alliance

Maine Small Business Coalition

Mainers for Working Families

Maria Robinson, State Representative, Massachusetts

Marjorie A. Porter, State Representative, New Hampshire

Mark V. Balfantz, At-Large School Board Member, Portland, Maine

Maryland Center on Economic Policy

Maryland Citizens' Health Initiative

Massachusetts Budget and Policy Center

Mia Gregerson, State Representative, Washington

Miami Freedom Project

Michael Brennan, State Representative, Maine

Michigan League for Public Policy

Missouri Budget Project

Missouri Jobs with Justice

Montana Budget & Policy Center

National Association or Minority Contractors Atlanta Chapter

National Black Worker Center Project

National Center for Transgender Equality

National Employment Law Project

National Immigration Law Center

National Korean American Service & Education Consortium (NAKASEC)

National Korean American Service & Education Consortium (NAKASEC) Virginia

New Jersey Policy Perspective

New Mexico Center on Law and Poverty

New Mexico Voices for Children

New Virginia Majority

Nicole Collier, State Representative, Texas

Nonprofit Professional Employees Union

North Carolina Justice Center

Northwest Health Law Advocates

Ohio Organizing Collaborative

Oklahoma Policy Institute

One Voice, Inc.

Opportunity Arizona

Oregon Center for Public Policy

Our Future West Virginia

Our Revolution

Oxfam America

Partnership for Southern Equity

Patriotic Millionaires

Paul Krizek, Delegate, Virginia

Pennsylvania Budget and Policy Center

Pennsylvania Health Access Network

People's Action

Pious Ali, At-Large City Council Member, Portland, Maine

Policy Matters Ohio

Power Coalition for Equity & Justice

Prevention Institute

Progressive Leadership Alliance of Nevada

Prosperity Now

Public Assets Institute

Randolph Bracy, State Senator, Florida

Restaurant Opportunities Centers (ROC) United

Rosanna Gabaldon, State Representative, Arizona

SC Appleseed Legal Justice Center

Service Employees International Union

Service Employees International Union Connecticut State Council

Sharon Beasley-Teague, State Representative, Georgia

Southern Economic Advancement Project

SPLC Action Fund

State Innovation Exchange

Tae Chong, City Councilor, Portland, Maine

TakeAction Minnesota

Tax March

Terry Garrison, State Representative, North Carolina

The Bell Policy Center

The Common Ground Project

The Commonwealth Institute for Fiscal Analysis

The King Center

Thrive Kentucky Coalition

Tina Wildberger, State Representative, Hawaii

TransFormation Alliance

Troy Jackson, State Senate President, Maine

UHCAN Ohio

Virginia Organizing

Voices for Utah Children

Voices for Utah Children

Washington State Budget & Policy Center

West Virginia AFL-CIO

West Virginia Center on Budget and Policy

West Virginia Citizen Action Group

West Virginia Education Association

West Virginia FREE

West Virginians for Affordable Health Care

Woori Center

Working Partnerships USA

Workplace Fairness