New York State and Local Governments Need Federal Aid to Overcome Fiscal Challenges Created by COVID Crisis

Without federal assistance, schools, hospitals, police, fire departments, other essential public services will face crippling reductions in funding

“As New York State continues to grapple with the COVID public health crisis, we are increasingly faced with another crisis: the financial fallout of this unprecedented emergency. If not addressed head-on, this crisis will result in billions in funding cuts to public schools, hospitals, police and fire agencies, public works departments, and numerous other essential public services.

“This crisis has been especially devastating for New York State, which has seen the most significant losses to date. There is simply no way New York State can overcome this massive revenue shortfall, estimated at over $13.3 billion, without significant funding from our federal government. That is why I am calling on our representatives in Congress to ensure that the next COVID relief bill includes adequate aid for states and localities.

“Without direct aid from Washington, our state and local governments will lack the resources needed to support our schools, our hospitals, our police, our firefighters, and our food banks. This pandemic has caused unprecedented losses in income tax and sales tax revenue. State and local governments rely on those revenues to balance their budgets. We need federal help to fill in these gaps.

“For years, New York State has been a “donor state” to the federal government, sending billions more in revenue annually than it receives back. In the 2018 fiscal year, New York State paid $26.6 billion more in federal taxes than it received back in federal funding — the largest gap of any state. New York has long shouldered the financial burden for states that have greater needs. Now that New York has experienced the worst COVID outbreak in the nation, the federal government should respond with funding to meet our tremendous needs. It’s time for the federal government to step up and support New Yorkers the same way the federal government has been supporting other less wealthy states for decades.

“Our state is not the only state in dire need of federal support. There is broad bipartisan consensus on the need for aid to states and municipalities. The National Governors Association, consisting of leaders from both major parties, has agreed that states need a minimum of $500 billion in direct assistance to get through this crisis.

“We need direct federal aid in the next COVID relief bill in order to avert catastrophic budget cuts. If Congress fails to act, millions of New Yorkers and countless more Americans will lose critical public services that we need to manage this crisis, restart our economy, and return to some degree of normalcy.”