States Plead for More Federal Help as Virus Outbreaks Worsen

With more shutdowns looming and a vaccine still months away from wide distribution, governors across the U.S. are pleading for more help from Washington ahead of what is shaping up to be a bleak winter.

Renewed restrictions on indoor businesses, the coming end of unemployment benefits for millions of Americans and overloaded hospitals have led governors to paint a dire picture of the months ahead unless the federal government steps in with more money and leadership to help them shore up their damaged budgets and beat back the resurgence of the coronavirus.

Between now and June 2022, state and local governments could be facing a shortfall or $400 billion or more by some estimates.

Illinois Gov. J.B. Pritzker signed a budget over the summer with a $5 billion deficit, which he and lawmakers assumed would be covered by a second federal coronavirus relief package that has not materialized.

“Every state … every city is suffering from failure of revenues because of COVID-19,” said Pritzker, a Democrat. “The federal government is really the only resource that we all have to turn to.”

On Tuesday, Pritzker was scheduled to join other governors of Great Lakes states — Democrats and Republicans alike — in calling for help with testing, contact tracing and hospital staffing, in addition to more money for businesses, schools and the unemployed.

The cost of distributing tens of millions of doses of a vaccine in 2021 is also emerging as a major concern for governors. The Association of State and Territorial Health Officers and the Association of Immunization Managers have called on Congress to provide $8.4 billion for vaccine distribution.

A new infusion of federal money does not appear to be on the way anytime soon. State and local governments have been pushing for more federal help since spring, when Congress and President Donald Trump agreed to a series of measures worth nearly $3 trillion to deal with the outbreak.

The aid included a big boost, since expired, to weekly unemployment benefits, along with grants and loans for businesses and assistance to state, territorial, local and tribal governments.

States have used the money for testing and contact tracing, assisting businesses, helping residents with utility bills and rent and expanding broadband access for students attending school remotely. But they have not generally been allowed to use it for one of their major needs: replacing declining tax revenue to keep regular government services running.

The needs have become more urgent as the virus rampages across virtually every state. California and Texas each have exceeded 1 million cases.

As intensive care units fill up, some Republican governors once reluctant to impose mask mandates have reversed course, and some cities and states are threatening fines against businesses that violate restrictions on social gatherings.

The Center on Budget and Policy Priorities estimates that state, local, territorial and tribal government budgets will be short collectively by $275 billion to $415 billion through June 2022 if they use all their reserve money to help deal with the virus. Moody’s Analytics said that for states alone, the shortfall could range from $196 billion to $396 billion, depending on how bad the virus outbreak gets.