Activist and non-profit groups across Kentucky have jointly signed a letter calling on Congress to provide fiscal relief to states to offset the impact of the pandemic on state revenues and budgets.
As noted by both governors and experts across the political spectrum, only the federal government has the wherewithal to provide the help needed, both in amount and in length of time. Without such help, the recessionary impact on state and local budgets will be much deeper and will last much longer.
There are reports that some in Congress want to wait on any further help, while others are saying they don’t think any more help is needed at all. The numbers say otherwise.
Here is the letter sent by the organizations, with the list of signatories at the bottom.
Dear Congress:
Educating children, protecting families, supporting healthy communities, and other investments in Kentucky are essential to reducing harm during the COVID-19 crisis and creating a pathway to eventual recovery. As we can safely increase economic activity, the stronger the building blocks of our communities are, the healthier our economy will be.
That is why we, the 48 undersigned organizations from across the commonwealth, are deeply concerned by the fiscal situation Kentucky faces. Layoffs and reduced consumer activity related to the pandemic have led to a truly shocking state revenue forecast. The Office of the State Budget Director estimates that Kentucky’s General Fund will experience a shortfall in the fiscal year ending June 30, 2020 of up to $495 million. Next year, the shortfall could easily exceed $1 billion. This will take place even as the state must increase spending through important programs like Medicaid to address the impact of the pandemic.
Without adequate federal fiscal aid, the depth of cuts required to balance our state budget will be devastating to communities that have not yet begun to reinvest after a decade of budget cuts caused by the Great Recession. Further funding reductions for our schools, health care, human services, infrastructure, public safety, and more, will hinder our response to COVID-19. Adding teachers, first responders, social workers, and other public servants to the long unemployment lines will only drag our economy further down.
Service reductions, layoffs, and other impacts will fall hardest on communities already facing structural barriers to health and well-being. Lacking the wealth, income, and proximity needed to access high-quality private services, Kentuckians of color, people living in the coalfields and other rural areas, Kentuckians with disabilities, the youngest and oldest of us, and many others will bear the brunt of the crisis. By harming Kentuckians, deeper inequality will further limit our economic potential together.
Yet none of this is inevitable. That is why we are calling on Congress to pass a robust federal fiscal relief package for states that prevents cuts to critical public services and cushions the blow from COVID-19.
Federal relief is the appropriate economic policy response to such a severe economic calamity. While states face balanced budget requirements, only the federal government has the ability to close an economic gap this wide. By doing so, Congress can help limit the harm and boost the economy once things open back up. In turn, a quicker, fuller recovery will help restore revenue growth at the state and federal level.
During the Great Recession, the American Recovery and Reinvestment Act provided $3.3 billion to fill holes in Kentucky’s budget. Those dollars were essential to keeping that recession from worsening into a depression. But in an important lesson for this moment, that funding ended too early — contributing to a decade of painful budget cuts. States cannot afford for such inadequacies to lead to another round of historically deep and protracted troubles.
Early indicators suggest the COVID-19 downturn may be worse than the Great Recession. As of May 9, more than 740,000 Kentucky unemployment insurance claims had been filed. The federal government has provided some aid to states, but that assistance is set to expire, and it is not nearly enough given the depth of the crisis as shown in new economic forecasts.
Experts now estimate that states need Congress to provide at least $650 billion in relief. This aid — which must continue until the economy has fully recovered — can be delivered through tools like a further increase in the federal match for Medicaid and through flexible grants to states.
Kentucky communities are in this together, and so are states. We all need Congress to protect our economy in this crisis and provide a path to a full recovery.
Signed,
|
|