PRESS RELEASE: STATE TREASURERS TO CONGRESS: REJECT GOP CALLS TO RAID COVID RELIEF FUNDS FOR INFRASTRUCTURE

FOR IMMEDIATE RELEASE
May 27, 2021

Contact: 
Maddy McDaniel, Communications Director

[email protected] or 914-471-7716

STATE TREASURERS TO CONGRESS: REJECT GOP CALLS TO RAID COVID RELIEF FUNDS FOR INFRASTRUCTURE

14 State Treasurers Sign Letter Urging Their Congressional Delegations to Reject GOP Calls To Raid Covid Relief Funds To Finance Infrastructure Investment

State Treasurers: “Repurposing covid relief funding would result in a massive loss of revenue for large and small communities alike, at precisely the moment they need to be doing everything to get our economy going again”

Today At 1:30 PM ET: Senators Markey and Wyden Respond To The Latest GOP Infrastructure Counter-Proposal

WASHINGTON, DC — Today, 14 state treasurers signed a letter urging their congressional delegations to reject Senate Republicans’ plan to raid Covid relief funding to finance their unserious counter-proposal, which would jeopardize U.S. economic recovery at precisely the moment when lawmakers must continue to invest to jumpstart the economy.

President Biden’s American Jobs and Families Plans are a once-in-a-generation investment to improve the lives of working Americans by creating millions of high-paying jobs, strengthening the nation’s physical infrastructure, and helping working Americans make ends meet and get a leg up, including by supporting families with children with tax breaks and affordable child care options. 

“State governments have been in the trenches while proponents of this ‘compromise’ have been on vacation in Cancun,” said Nevada State Treasurer Zach Conine. “Nevada’s communities need help, not the same disingenuous underinvestment and accounting tricks.”

“This proposal is nothing short of highway robbery. Working in a bipartisan fashion with Wisconsin’s 72 county treasurers, I’ve seen firsthand that local governments were already making steep cuts to keep basic, essential services running – and now Senate Republicans want to rip away their relief,” said Wisconsin State Treasurer Sarah Godlewski. 

“I’m glad Congressional Republicans recognize the importance of infrastructure, but raiding money given to states to help them weather a once in a lifetime crisis is irresponsible and dangerous,” said Oregon State Treasurer Tobias Read. “It will mean less help for working families and students as they work to emerge from this crisis and that is unacceptable.”

“We are incredibly grateful to the Biden Administration for their leadership behind the American Rescue Plan Act. The funds coming from this historic program are being used for critical investments in towns across the country. For deferred maintenance issues like expanding police stations or replacing lead pipes in local water systems to shoring up revenue shortfalls, roads, and supporting hospitals,” said Delaware State Treasurer Colleen Davis. “After this exhausting and damaging pandemic local governments especially need this support. And it’s no different here in Delaware. Small towns in Delaware are the fabric of our state. They are our identity. For many, this is their first direct support related to the pandemic. They are in desperate need of funds and now is not the time to play political games.”

Weeks after bragging about the good that they have done for Main Street USA, certain members of Congress want to threaten economic collapse to protect their billionaire donors and fund their pet projects with money they already promised to cities and states,” said Illinois State Treasurer Michael W. Frerichs. “This cannot stand. No one in good faith can deny the harm that would come to pass if Congress demanded that the financial aid it wisely promised must now be forfeited. Doing so would cause generational harm to workers and employers alike.”

“We have a once-in-a-generation chance to address acute needs in the areas of affordable housing and mental health, as well as many other critical needs related to economic justice.  Attention to these issues will lift up working families across Colorado and this country,” said Colorado Treasurer David L. Young. “At the same time, with the President’s proposed infrastructure plan, we can create opportunities–short and long term–by dedicating resources to long-deferred infrastructure needs. We have to stop playing different needs against each other as if it’s a zero-sum game.  This jaded “us vs. them” approach divides us and reduces our competitiveness in the world. If we continue down that failed pathway, we’ll be lucky just to maintain the status quo.”

“The ARP funds have contributed to our quick economic recovery, and states have relied on them as we have balanced our budgets. Ripping away those funds now that things are working economically again just doesn’t make sense,” said Washington State Treasurer Michael J. Pellicciotti.

The state treasurers write in the letter

“Our country’s economy is only as healthy as the economies in our states. Investing with state and local governments adds $1.36 to the GDP for every dollar spent and underfunding them puts a drag on our nation. In 2009, Congress stripped billions in state and local aid from the American Recovery and Reinvestment Act. Without that aid, it took nearly a decade for state and local governments to return to pre-crisis employment levels, slowing the pace of the recovery for the entire country.

Clawing back funds from the American Rescue Plan would be making the same mistake again, and even more so. 

Funding from the Plan is enabling large cities, small towns and rural communities alike to get back on their feet despite significantly lower tax revenues. These funds are keeping police, teachers, and firefighters on the job. They are addressing cyber security and technology challenges exposed by the pandemic. And are keeping programs, capacities, and systems in place that help our hometowns thrive. It is our local communities that provide a quality of life for the people who live there. Repurposing covid relief funding would result in a massive loss of revenue for large and small communities alike, at precisely the moment they need to be doing everything to get our economy going again.”  
 
The latest Republican infrastructure plan would shortchange economic recovery in the states by raiding the American Rescue Plan funding that was meant to keep essential workers on the job. 

  • Underfunding the economic recovery in the states would put a drag on the country’s economy. In 2009, Republicans cut billions of dollars of state and local aid from the American Recovery and Reinvestment Act, and the results were devastating: 
    • States were forced to make disastrous cuts to education. Ten years after the great recession, state financial spending for higher education was still down 13%. In 2016, funding for K-12 education was lower in 29 states than it had been in 2008 — down at least 10% in nine of those states.
    • In the wake of the recession, state aid to localities was down by 5.3% — putting a strain on local budgets and exposing cities to greater risk of financial problems.
    • Overall, it took nearly a decade for state and local governments to return to pre-crisis employment levels. 
  • Repurposing covid relief funding would result in a massive loss of revenue for large and small communities alike, at precisely the moment they need to be doing everything to get our economy going again
    • Funding from the Plan is enabling large cities, small towns and rural communities alike to get back on their feet despite significantly lower tax revenues.
    • These funds are keeping police, teachers, and firefighters on the job, addressing cyber security and technology challenges exposed by the pandemic, and keeping programs and systems in place that Americans across the country rely on. 
Read the full letter and view its signers here.

The economic crisis caused by the pandemic took a severe toll on the financial health of states and municipalities across the country. Tax revenues plummeted while the cost of battling the pandemic skyrocketed, forcing states to layoff essential workers and put jobs at risk. Without aid, states and municipalities risked budget shortfalls of more than $500 billion.

The American Rescue Plan offered much-needed relief to allow states and their local communities to keep essential workers on the job, to safely reopen schools, to accelerate mass vaccination efforts, and to invest in local businesses and communities. These investments are already getting shots in arms and protecting the jobs of teachers, firefighters, health care workers, and law enforcement. They will ensure not only recovery from the losses of the pandemic, but actually help reach pre-pandemic forecasts of economic growth. 

Now that the road to recovery is clear, some members of Congress are considering clawing back these vital funds to pay for other priorities. As State Treasurers and guardians of our states’ fiscal health, we urge Congress to resist calls to raid Covid relief funding. The risks are too great and will cause a longer, more difficult economic recovery for everyone. 

Our country’s economy is only as healthy as the economies in our states. Investing with state and local governments adds $1.36 to the GDP for every dollar spent and underfunding them puts a drag on our nation. In 2009, Congress stripped billions in state and local aid from the American Recovery and Reinvestment Act. Without that aid, it took nearly a decade for state and local governments to return to pre-crisis employment levels, slowing the pace of the recovery for the entire country.

Clawing back funds from the American Rescue Plan would be making the same mistake again, and even more so. 

Funding from the Plan is enabling large cities, small towns and rural communities alike to get back on their feet despite significantly lower tax revenues. These funds are keeping police, teachers, and firefighters on the job. They are addressing cyber security and technology challenges exposed by the pandemic. And are keeping programs, capacities, and systems in place that help our hometowns thrive. It is our local communities that provide a quality of life for the people who live there. Repurposing covid relief funding would result in a massive loss of revenue for large and small communities alike, at precisely the moment they need to be doing everything to get our economy going again. 

Congress must honor its commitments to its people, to our states, and our local communities.  We must ensure a sustainable, equitable recovery from the pandemic — and commit once and for all to keeping the entire country’s recovery as our top priority.

The letter’s signers include: 

  • California State Treasurer Fiona Ma
  • Delaware State Treasurer Colleen Davis
  • Illinois State Treasurer Mike Frerichs
  • Maryland State Treasurer Nancy Kopp
  • Massachusetts State Treasurer and Receiver-General Deborah Goldberg
  • Nevada State Treasurer Zach Conine 
  • Oregon State Treasurer Tobias Read
  • Vermont State Treasurer Beth Pearce 
  • Washington State Treasurer Mike Pellicciotti 
  • Colorado State Treasurer David L. Young
  • Wisconsin State Treasurer Sarah A. Godlewski
  • Connecticut Treasurer Shawn Wooden
  • New Mexico State Treasurer Tim Eichenber
The signers above are available for interviews. To get in touch, please contact [email protected] 

About Invest in America

Invest In America is a national rapid response operation advocating for robust public investment to rescue the economy from the COVID crisis and create prosperity for the future, and to fight back against fear-mongers who use deficit concerns as a scapegoat to starve American communities and businesses of resources.

The operation consists of two components: Invest in America, the charitable and public education arm, which is a fiscally sponsored project of Economic Security Project funded by the William and Flora Hewlett Foundation and Economic Security Project co-chair Chris Hughes; and Invest in America Action, the advocacy and social welfare arm, which is a fiscally sponsored project of Economic Security Project Action funded by Chris Hughes and the Omidyar Network.

Learn more at InvestInAmericaNow.com and @InvestNowUSA, and InvestinAmericaProject.com.

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