Counties need more flexibility and more money in next relief package
Counties face a $202 billion fiscal impact, including $114 billion in revenue loss due to the pandemic and need the next relief package to include direct and flexible funding to heal deep economic wounds.
In a National Association of Counties press call, Matthew Chase, executive director and CEO of NACo, said counties are not looking for the federal government to cover 100% of their costs, but want to find “common ground.”
“We understand that counties have a responsibility to tighten our belt and be good stewards of public dollars but we are asking for more than zero,” Chase said. “We’re trying to find a reasonable common ground on what’s needed.”
The call comes on the heels of Senate Republicans introduction of a $1 trillion emergency relief package late Monday. NACo called this HEALS Act an important step in the legislative process and hopes lawmakers will meet in the middle to provide funding to counties.
The Senate Republican proposal is being used as a negotiating tool with congressional Democrats who are supporting the much larger House-passed $3.5 trillion HEROES Act that includes $915 billion in direct aid for state and local governments.
The Senate Republican proposal doesn’t include any new funding for states or municipal governments but does include $105 billion for an Education Stabilization Fund. The bill would also give more flexibility to state, local and tribal governments for using the $150 billion previously allocated under the CARES Act. That bill passed in late March.
However, some say that the added flexibility may be too little too late.
“We need greater flexibility,” said Christian Leinbach, the commissioner of Berks County, Pennsylvania. “I know there are efforts right now to try to change the flexibility rules for CARES money and while I appreciate that, that money has largely been committed and committed under the old rules. So changing the flexibility of the CARES Act money has very limited value for most counties.”
The CARES Act established a $150 billion Coronvirus Relief Fund for states as well as counties and cities with populations over 500,000. States then allocate that money to municipalities that are not eligible. That was an issue for Leinbach since his county has a population of about 421,000. Berks County estimated receiving $75 million from the CARES Act, but only received $38 million.
That money would reach the county’s health system, food bank and overall county needs, Leinbach said.
“We can’t fill those needs and ignore everyone else,” Leinbach said. “The $38 million that we’re receiving, which is almost 50% of what we anticipated is not close to what we need.”
Leinbach said the Senate Republican’s bill fails “dramatically” and said direct funding is needed for counties.
“We need another round of funding,” Leinbach said. “While the HEALS Act coming out of the Senate is a reasonable start and while I too as a fiscal conservative am concerned about just spending money that our future generations are going to have to pay — I believe that the HEALS Act as it is currently is in the Senate fails dramatically when we look at addressing county government and getting the money to the local government where it is needed.”
Carlos Gimenez, mayor of Miami-Dade County in Florida, welcomed the Senate’s relief package and said he was glad to see both House and Senate plans ready for negotiations.
Toni Preckwinkle, Cook County, Illinois board president is hopeful that the federal government will pass another relief package that prioritizes flexibility in CARES Act funding and provides for lost revenue.
Currently, 71% of counties have cut or delayed capital investments, according to NACo.
Leinbach said his county cut $5 million in capital projects scheduled to have begun this year, one of those being a new county jail projected to cost $150 million.
“We announced two months ago that that project is being put off indefinitely because we know there is no way we can put a tax increase that would be required for that project, on our taxpayers knowing what they are going through economically,” Leinbach said.
Uncertainty stemming from the pandemic and relief would take away that uncertainty, said Gary Moore, NACo president and judge in Boone County, Kentucky.
“Uncertainty is leading to this fact that projects are being delayed,” Moore said. “That’s why relief is so important because it would take away a lot of that uncertainty.”