Cuomo, National Governors Association Press Congress for $500B in Critical COVID Aid
John Jordan | July 2020
New York Gov. Andrew Cuomo and the National Governors Association are pressing Congress to include billions of dollars in financial assistance to state governments as part of the next COVID-19 aid package currently being debated in Washington, D.C.
Gov. Cuomo in a letter to the New York Congressional delegation said that New York State is facing a $30-billion deficit over the next two fiscal years ($14 billion in the current fiscal year and $16 billon in the 2022 fiscal year), while the MTA is expected to encounter a $12-billion shortfall and the Port Authority can expect a $3-billion budget gap.
Cuomo praised the House-passed HEROES Act, which includes repeal of the SALT tax. However, he was highly critical of the GOP-backed HEALS Act plan, which does not include assistance to state governments.
“I applaud the HEROES Act proposed by the House of Representatives, Speaker Pelosi and the New York members. It is essential that the Senate include the HEROES Act provision on the repeal of SALT in the final bill,” Cuomo stated in the letter. “The Federal SALT provision passed in 2017 was effectively a theft from the people of the State of New York. That federal action alone is costing New Yorkers as much as $15 billion in additional federal taxes, an average cost of $8,700 impacted New Yorkers.”
He added, “Repealing SALT in the bill is essential. I have publicly called on you to vote against any bill that does not include the SALT reform included in the House bill. New Yorkers have heard too many excuses for too long.”
In terms of state operations, Cuomo said that as a direct result of the pandemic and without additional federal aid, the state will need to reduce funding for hospitals, schools and local governments by 20%.
He noted that the current Republican Senate bill requires full funding for education. If New York State does not receive at least the $14 billion for 2021 and $16 billion for 2022, but must fully fund education, there will be greater cuts to hospitals and local governments.
Maryland Gov. Larry Hogan and Cuomo, the National Governors Association chair and vice chair respectively, released a statement today calling for Congress to include $500 billion in unrestricted aid to state governments as part of the next COVID-relief package.
“Goldman Sachs analysts assert that the measures that Congress has passed to date will cover less than half the expected state shortfalls, even when combined with state rainy day funds,” Hogan and Cuomo stated. “Moody’s Analytics has noted that without federal revenue replacement, state and local governments would need to cut more than $500 billion—shaving two full percentage points off the GDP and eliminating more than 3 million jobs.”
The two governors stated that nearly every category of state and local revenue is experiencing pandemic-related losses. States and localities that rely on income taxes are seeing much lower revenue due to high unemployment and sales tax income is also declining due to the sharp drop in consumer spending and store closures. Limited travel also means less revenue from gasoline taxes for transportation projects, they noted.
“We stand firm in our request for federal aid in the amount of $500 billion over the next three years,” Hogan and Cuomo stated. “This will ensure a strong recovery for our nation. It is time for Congress to come together to help restore our nation’s health and economy.”