After weeks of pleas and dire warnings from state and local officials, House Democrats could attempt to direct $1 trillion in funding to those entities, House Speaker Nancy Pelosi of California said Thursday. For Louisville, a piece of that stimulus could help avert major budget cuts as the city faces an estimated $115 million in lost revenue in this fiscal year and the next.
Pelosi could not say when such funding may be formally proposed or passed, but said she wants it to be available for governments for three to four years.
“We’re not going to be able to cover all of it,” she said, referring to lost revenue. “But to the extent that we can keep the states and localities sustainable, that’s our goal.”
Some members of Kentucky’s congressional delegation have taken opposing sides to the issue of sending additional aid to cities and states.
Rep. John Yarmuth, a Democrat who chairs the House budget committee, said he thinks more funding is needed to save thousands of state and local employee jobs. He said he was confident such funding would come, since many of his House colleagues — Democrats and Republicans — are hearing the same concerns about cities’ and states’ fiscal statuses as he is.
Yarmuth said he was not concerned about the Senate passing a funding package, but rather how much less it might be than what Pelosi proposed. He said the $1 trillion figure was probably meant to put the House in a bargaining position, with a final number coming in between $500 and $700 billion.
He said Congress’ strategy so far has been preserving jobs in the private sector with the Paycheck Protection Program.
“This is just more of the same, this is just a different segment of the economy” he said. “So every job we save in the public sector, particularly those jobs that are vital for our citizens, it’s no different than saving a job in the private sector.”
On Fox News today, Senate Majority Leader Mitch McConnell expressed some resistance to the idea.
“The point is we are not interested in borrowing money from future generations to send down to states to help them with bad decisions they’ve made in the past unrelated to the coronavirus epidemic,” he said. “We are more than happy, and already have, sent $150 billion down to states and localities to deal with the pandemic.”
In an emailed statement, McConnell’s campaign manager Kevin Golden touted the Senator’s leadership in the passage of the CARES Act, and said more support would come. McConnell is running for what would be his seventh term in the Senate this year.
“Every corner of Kentucky is directly benefiting from this aid, and folks know Senator McConnell’s leadership is responsible for steering this aid to our Commonwealth,” he said.
McConnell stepped back somewhat from his comments last week that states could declare bankruptcy, and more recently said additional money would come with conditions including liability protections for businesses and employees.
Last week, Fischer proposed a continuity budget, saying that the economic uncertainty caused by the pandemic did not make it the right time to set new spending guidelines for the city. He said that as long as aid is received or known to be on its way by Oct. 1, the city will be able to push off the conversation on budget cuts.
In the meantime, the city may tap into short-term debt to allow it to pay for operations.
Louisville Mayor Greg Fischer said previously that Louisville was allocated about $134 million from the federal government to reimburse direct COVID-19 response expenses. He has argued that cities need flexible funding to pay for staff and services. He has already furloughed 380 city workers indefinitely.
Fischer is asking the federal government both for flexibility in spending from CARES Act allocations, and for additional funding, a spokeswoman said in an emailed statement.
“Without this, cities across the nation, including Louisville, will be faced with having to make drastic cuts to services and staff, including police, fire, EMS and public health workers,” Jessica Wethington said.
The Metro Council’s budget committee will commence its review of the budget on Monday,