State Treasurers to Congress: Honor Your Commitment to State and Local Governments
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.
California State Treasurer Fiona Ma
Colorado State Treasurer David L. Young
Connecticut Treasurer Shawn Wooden
Delaware State Treasurer Colleen Davis
Illinois State Treasurer Mike Frerichs
Kansas State Treasurer Lynn Rogers
Maryland State Treasurer Nancy Kopp
Massachusetts State Treasurer and Receiver-General Deborah Goldberg
Nevada State Treasurer Zach Conine
New Mexico State Treasurer Tim Eichenberg
Oregon State Treasurer Tobias Read
Vermont State Treasurer Beth Pearce
Washington State Treasurer Mike Pellicciotti
Wisconsin State Treasurer Sarah A. Godlewski