SACRAMENTO — A $900 billion coronavirus aid package that congressional leaders agreed to Sunday includes no dedicated money for state or local governments, undercutting hopes that California and many of its cities would be able to close growing budget gaps without major cuts.
The deal, which the House and Senate are expected to vote on as early as Sunday night, includes a new round of direct $600 stimulus payments to many adults and their dependent children, an additional $300 a week in jobless aid, rental and food assistance, money for vaccine distribution and a small business loan program, all of which could help ordinary Californians struggling through the pandemic.
Additional funding for schools may also be a key factor in reopening classrooms next year, as a battle between state leaders and teachers unions over when and how to resume in-person learning heats up.
But despite months of maneuvering by Democrats on Capitol Hill, and pleas by state and local officials, Republicans blocked aid that they argued would amount to a bailout for poorly run governments.
“We are disappointed that Republicans have refused to recognize the need to honor our heroic frontline workers by supporting robust funding for state and local governments,” House Speaker Nancy Pelosi, D-San Francisco, said in a letter to Democratic House members Sunday. “State and local governments need much more funding to prevent senseless layoffs and critical service cuts. The agreement does provide some new targeted funds for government functions that will help ease their budget burdens.”
Congress’ decision to leave out a fresh infusion of direct aid leaves California with difficult decisions as it faces down what analysts project will be a multibillion-dollar operating deficit over the next few years.
Gov. Gavin Newsom must put together a proposal for a balanced budget by Jan. 10. A spokesperson for his Department of Finance, H.D. Palmer, said the governor is working directly with House Speaker Nancy Pelosi to resume the push for federal help for state and local governments after President-elect Joe Biden is inaugurated Jan. 20.
“Those fiscal pressures are still going to be there next month, when a new Congress and a new administration take office,” Palmer said.
Assembly Member Phil Ting, the San Francisco Democrat who chairs the Assembly budget committee, said it was unbelievable that the the federal government was not doing everything possible to prevent states and cities from sinking deeper into economic crises.
“State and local governments are the ones primarily providing services to people. During a pandemic, people are relying on their government more than ever before,” Ting said. “The federal government’s responsibility is to be a social safety net during a crisis. That’s why they can borrow money.”
The picture for California is not as a grim as it appeared even a few months ago, however, when legislators and Newsom had to close a $54.3 billion budget deficit.
Because wealthy households that provide a large amount of state revenue through personal income taxes have enjoyed a stronger economic recovery than officials anticipated, tax collections are coming in well ahead of budget projections. The nonpartisan Legislative Analyst’s Office estimated last month that California would have a $26 billion windfall by the next fiscal year, a one-time cushion that would soften the losses of the pandemic.
But the financial losses are still expected to mount in the years ahead. By 2024-25, California will face a budget gap of about $17.5 billion, the Legislative Analyst’s Office reported, which may require either spending cuts or new taxes.
Without new federal aid, California has fewer options for using its windfall, much of which must be socked away to replenish state reserve accounts, Ting said.
Lawmakers had hoped to reverse about $11 billion in deferred school funding and cuts to universities, courts, affordable-housing grants and state worker pay that were required to balance this year’s budget, while also developing their own state economic stimulus programs. Ideas included covering rent that tenants couldn’t pay because of the pandemic, providing tax breaks to small businesses, funding climate-friendly infrastructure projects and getting more homeless people housed.
“It does force us to decide between plugging the hole from last year and making additional investments this year,” Ting said.
The federal aid package includes $25 billion to provide emergency rental assistance, which could help California deal with one of its most urgent problems: whether and how to extend a moratorium on evicting tenants for nonpayment of rent, which is set to expire at the end of January.
Lawmakers want to extend the moratorium to avert a wave of evictions, but property owners have become increasingly vocal about their desire for financial assistance to cover lost rent and help them pay their bills. The Federal Reserve Bank of Philadelphia has estimated that nearly 240,000 Californians will owe almost $1.7 billion in rent by the end of 2020.
Another major concern of lawmakers is that widespread layoffs could hit the public sector, exacerbating California’s high unemployment rate. Cities, which are heavily reliant on sales and tourism taxes that have dried up during the pandemic, are even more vulnerable than the state.
San Francisco faces a new deficit of $653.2 million over the next two fiscal years, leading Mayor London Breed to direct departments last week to slash costs.
Alexei Koseff is a San Francisco Chronicle staff writer. Email: alexei.koseff@sfchronicle.com Twitter: @akoseff
The Link LonkDecember 21, 2020 at 06:44AM
https://www.sfchronicle.com/politics/article/California-hard-pressed-cities-lose-in-COVID-15818112.php
California, hard-pressed cities lose in COVID stimulus deal as aid is left out - San Francisco Chronicle
https://news.google.com/search?q=hard&hl=en-US&gl=US&ceid=US:en
No comments:
Post a Comment