A well-known Washington think tank is recommending that Congress pass a new COVID-19 relief bill that will provide anywhere from $700 billion to $1 trillion during the next 18 months, specifically for state and local aid.
In an op-ed, Mark Muro, policy director with the Brookings Institute, has said that such funding will help to blunt “coming services cuts and layoffs” forecast at the state and local level, owing to the virus outbreak, but will keep “regional fiscal contractions from deepening the crisis and slowing the recovery.”
In addition, Muro suggests that such funding should be calibrated to respond to the specific economic burdens faced by the individual states, noting, for example, that some states such as Florida, Hawaii, and Nevada, may require greater assistance because their economies depend significantly on tourism and travel.
Federal aid may also be predicated on the level of joblessness in each state, a figure that changes greatly from state to state.
According to the most recent Department of Labor statistics, new unemployment insurance claims were up by 15 percent in both Arizona and New Mexico as of early April, while claims saw a 5 to 10 percent increase in Colorado and Texas.
The emphasis on more direct aid to the states has also been touted by the Washington-based Center on Budget and Policy Priorities, which noted that the states collectively may be facing budget shortfalls in the next fiscal year in excess of $500 billion.
Congress is currently in the process of debating what a new stimulus bill will look like.
By Garry Boulard
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