Politico

Biden finds unlikely allies for massive state rescue: local GOP officials


Republicans in Congress attacking President Joe Biden’s plan to pour hundreds of billions of dollars in pandemic relief aid into local governments are facing resistance — from GOP-run states and cities.

Republican mayors in Texas, Arizona, Florida and Oklahoma are among those backing Biden’s state and local government funding plan as part of the $1.9 trillion coronavirus aid bill that’s before the Senate, defying GOP lawmakers in Washington, who are broadly resisting the spending.

“In a crisis and an emergency, you check partisanship at the door, and you get through the crisis,” said John Giles, the Republican mayor of Mesa, Ariz. “You can get back to playing politics when the crisis is over. And so this is one of those times.”

The clash between local and national Republicans is a rare public division in a party that has generally been united in opposition to policies being pushed by Biden and Democrats in control of Congress. It’s a breach that Biden and House Speaker Nancy Pelosi have gone out of their way to exploit as the coronavirus legislation enters the final stretch.

Lawmakers including Senate Minority Leader Mitch McConnell of Kentucky, Sens. Rick Scott and Marco Rubio of Florida, and Ted Cruz of Texas have been among the most vocal national Republicans in rejecting the aid, calling it a “bailout” of what they say are poorly run Democratic states and arguing that state budgets fared much better than expected during the pandemic. They also say that a good chunk of the money doled out to the states by Congress last year remains unspent.

McConnell slammed the relief package in his opening remarks Friday, calling it “an ideological spending spree packed with non-Covid-related policies” and panning the $350 billion targeted for state governments as a “massive cash bailout for mismanaged state and local governments.”

But Giles and other mayors say their residents are locked in a struggle to fill pantries with food as municipal reserves and other dedicated funds are running dry.

“There has been an overwhelming backlash from our Republican congressmen and senators because of how much money is in this bill,” said Arlington, Texas, Mayor Jeff Williams. “For us, the reality is the need is very much here for cities.”

Williams said that when he talks with his counterparts in Washington he tells them “we have seen the great economists of our country all come together” in support of these additional funds for state and local governments.

He also draws on comments by Federal Reserve Chair Jerome Powell. While Powell hasn’t taken a specific position on state aid or the coronavirus legislation itself, he has often spoken of the drag on the economy from the loss of more than a million state government jobs during the pandemic.

Biden underlined the conflict within the party by inviting a bipartisan group of governors and mayors to the White House last month to discuss local funding issues. Pelosi late last month said Republicans in Congress were choosing to “mock” the aid package despite its broad support, citing a bipartisan letter signed by mayors across the country requesting more aid — including signatures from more than 30 Republicans.

Miami Mayor Francis Suarez, a Republican who attended the White House meeting, told POLITICO, “We’re hoping that it doesn’t become a partisan punching bag.” He said he hoped that “hearing from local officials that are on the ground, day in and day out, will be something that motivates elected officials from both parties” to support the funding.

GOP lawmakers say that a surge in tax revenue for most states following last year’s massive aid packages makes more help unnecessary now. But while the financial picture is brighter than many officials projected, some of the states hardest hit by the pandemic are represented by these lawmakers.

A recent report from Moody’s Analytics showed that five of the 10 states with the biggest budget shortfalls are Louisiana, Oklahoma, Alaska, Florida and Kansas. They were among 19 states where Moody’s identified looming budget shortfalls even after accounting for federal aid and local reserves. Ten of the 19 are represented by at least one GOP senator.

“It would be a dereliction of duty for me not to try to fight for $116 million that would allow us to restore our police, fire and other core services,” said Oklahoma City Mayor David Holt, a Republican.

City and county leaders are amplifying calls for support because the new bill sets aside more than $100 billion for municipal and county governments — just over $120 billion in a “local fiscal recovery fund,” according to the latest Senate version of the bill.

So while just 38 cities got funding in the first round in March, the United States Conference of Mayors estimates the new formula expands eligibility to 19,000 cities, towns and villages. That’s why more than 30 Republican mayors signed on to the letter in support of the package last month that Pelosi touted, with Giles, Holt, Suarez and Williams among them.

Giles said the city of Mesa was lucky enough to get $90 million in the first round of aid, but added, “We could have turned in twice that much in receipts that were tied to virus relief; our expenses have gone higher.”

“Because we’re in the food bank business, we’re in the buying laptop computers for school business, we’re in the rent, utility business. We’re doing all of these things that we weren’t doing a year and a half ago,” he said.

Even some Republican governors have publicly vouched for the plan, including Asa Hutchinson of Arkansas and Larry Hogan of Maryland, citing the financial stakes ahead.

Meanwhile, 22 Republican governors in a statement issued at the end of February criticized Biden’s funding plan — but only because their states will see a smaller share of the direct grant funding compared to what Congress sent them in March.

“The new stimulus proposal allocates aid based on a state’s unemployed population rather than its actual population, which punishes states that took a measured approach to the pandemic and entered the crisis with healthy state budgets and strong economies,” read the statement, whose signatories included Republican Governors Ron DeSantis of Florida, Kevin Stitt of Oklahoma and Doug Ducey of Arizona.

Many of Florida’s tourism-dependent cities have taken a financial beating, and the state faces a big shortfall for the coming budget year. Local media reported last month that the state deficit was estimated at $2 billion.

Yet the same day that Miami’s Suarez traveled to Washington to discuss local funding with the president, Republican Sen. Scott slammed Biden’s proposed aid package for the states in an editorial, saying the money would be used to “bail out fiscally irresponsible governors in New York and Illinois.” Rubio, Florida’s other Republican senator, has also spoken critically of more local aid, saying that some states “see this as the latest opportunity to get bailed out.”

But even with better outcomes for states overall, state and local government employment still hasn’t recovered from the pandemic downturn. The latest Bureau of Labor Statistics data show that they are still down about 1.4 million jobs from a year ago — about 1 million of which are in education.

Teryn Zmuda, chief economist of the National Association of Counties, said states do need the help.

“Local government specifically is down 1 million of those 10 million jobs that the nation is short right now,” Zmuda said. “So, aid to local governments will get those 1 million workers back in the workforce.”

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