There’s a battle brewing over federal aid to state and local governments for the novel coronavirus in the halls of the U.S. Capitol. The fighting is not just playing out in Congress, but counties and towns across Colorado.
Congress has already given aid to state and local governments for coronavirus response. Colorado got about $2.2 billion. It might seem like a lot, but you have to look at the breakdown. Five counties with populations of half a million or more are getting about 25 percent of those funds directly.
“What about the other 59 counties?” Weld County Commissioner Barbara Kirkmeyer asked.
Weld isn’t one of the five. She's waiting to see what the state does with the rest of the money, about $1.7 billion. Will the legislature hold on to it or dole it out?
“We’re feeling the impact of COVID-19 as well, especially with regard to how we’re trying to deal with it and respond and also when we get to recovery.”
With the state looking at a massive budget hole of its own, Kirkmeyer is worried the money won't trickle down. And she’s not the only one. Kevin Bommer, executive director of the Colorado Municipal League, said his members want assurances from the state.
“What would really be helpful is if the state of Colorado was expressing a formal commitment to working with all levels of government in mitigating the costs that they have and can document. And so far we haven’t heard that,” he said.
Gov. Jared Polis said the legislature holds the purse strings. It will have to sort out all the competing interests when it reconvenes in a few weeks.
But Polis also suggests local leaders focus their lobbying efforts on D.C., not Denver. In particular, what should be included “in that next phase, that Phase 4 of federal assistance.”
Democratic Sen. Michael Bennet and other members of the delegation are getting calls for more aid from local leaders across the political spectrum. “And not just a little aid, but a lot of aid for our state and local governments. I hope that in a COVID [version] 4 package we do much better for people who are on the front lines of fighting this crisis,” Bennet said.
One of the things they want is aid earmarked for local governments regardless of size. Bennet notes that the population cap has caused a lot of confusion and anxiety among local leaders.
GOP Rep. Scott Tipton said the delegation is sending congressional leadership a simple message: “Our smaller communities are just as important. And we need to make sure that they’re getting those resources back into counties and out into the communities as well.”
But as Congress passed additional funding for small businesses, hospitals and COVID-19 testing, state and local governments got left by the wayside. It was a preview of how difficult negotiations will get.
Governors and local leaders want flexibility when using aid money, including plugging some budget holes. It’s something current Treasury Department rules over the aid does not allow.
Not everyone in the state’s delegation agrees, however.
Republican Rep. Ken Buck, a budget hawk who has not voted for any of the coronavirus aid packages and the representative for Weld County, said federal dollars should only be used for direct COVID-19 costs.
“I don’t think governors should be able to shut down the economy in their state and then have the federal government pay for anything,” he said. “I think it has to be very closely monitored.”
The municipal league’s Bommer noted it’s not that black and white.
Unlike the federal government, state and local governments cannot deficit spend. And the response to the coronavirus has demolished tax revenues that fund all sorts of services, from public health to public safety.
“Keeping police officers on the street, keeping municipal operations open to process construction permits, those are COVID-related responses,” Bommer argued. “And we can't do that if you don't have any revenue.”
Congressional leaders and the White House are negotiating a fourth coronavirus stimulus bill. Any hope for a quick agreement on more aid to state and local governments dissipated last week.
Senate Majority Leader Mitch McConnell said he wants to pause before providing more assistance at the state and local level. He wants to wait until Congress is back in early May before serious negotiations begin. And McConnell even floated the idea that states could file for bankruptcy.
Bennet countered that the last thing the country needs in the middle of this economic crisis is cities and states filing for bankruptcy.
This crisis has brought about some strange political bedfellows. Democratic Rep. Jason Crow has teamed up with Republican Mayor Mike Coffman, the man who he replaced in Congress, to argue for more state and local aid. Crow echoed what the White House has said, this crisis will take a whole of government approach. McConnell’s recent words don’t reflect that.
“He’s shown repeatedly that he’s out of touch with American people, and certainly he’s out of touch with the suffering of the American people right now,” Crow said.
Weld Commissioner Kirkmeyer understands that funding should be COVID-19 related, but argued local governments should ultimately make the decision on how the aid is spent depending on the conditions on the ground.
She said all levels of government are in some financial trouble right now because of COVID-19. “I mean let’s face it, whether it’s the federal level, the state level or my county or municipal level, we’re all going to need to tighten our belts. That’s just going to be the fiscal reality of it,” Kirkmeyer said.
Just how tight those belts will be, and how deep the budget cuts local leaders face will face, depends in large part on Congress, how much state and local aid they decide to include and how long it takes leaders to negotiate.
