Scott, DeSantis disagree on federal COVID-19 aid for states, cities to replace lost revenue

The Center Square – Florida U.S. Senator Rick Scott opposes a prospective assistance package that would allow state and municipal governments to use federal money to replace revenue shortfalls attributable to combating the COVID-19 emergency.

Gov. Ron DeSantis, however, does not, although he said Sunday any COVID-19 state/city relief package should not be used to cover “pre-pandemic” obligations, such as underfunded pension funds.

“Obviously, this is going to hit our revenues, because you have had key sectors of our economy, like tourism, that have taken a huge hit,” DeSantis said on Fox News’ “Sunday Morning Futures.” “It’s one thing to help a state with lost revenue from the pandemic, but this pandemic should not be used to bail out obligations that were run up over 20 or 30 years.”

Last week, Scott joined Republican U.S. senators Ted Cruz of Texas, Mike Enzi of Wyoming, Ron Johnson of Wisconsin and Mike Lee of Utah in dispatching a letter to President Donald Trump, urging him to reject any assistance package that allows states to use funding for noncoronavirus-related expenses.

“Unfortunately, we are hearing reports that some states and localities are advocating that a potential future coronavirus response measure be used as a piggybank for unrelated expenses that have nothing to do with responding to the coronavirus,” the letter read.

The senators specifically oppose “money sent to the states for ‘lost revenue’ or without appropriate safeguards … to bail out unfunded pensions, reward decades of state mismanagement, and incentivize states to become more reliant on federal taxpayers.”

Congress already has allocated more than $3 trillion over the past seven weeks in a series of COVID-19 assistance packages, including the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act signed into law by President Donald Trump on March 27.

 

The CARES Act included $150 billion to help cities and states respond to the pandemic, but prohibits using the funds to plug budget shortfalls.

Any future assistance should come with same requirements, the senators said, noting New York is “calling for billions in unrestricted aid … for pre-existing state programs and debts,” and “Illinois has already requested a $40 billion bailout, most of which would go to pension and budget shortfalls caused by decades of fiscal mismanagement.”

DeSantis on Sunday agreed with the senators’ concerns, but said states have “lost” revenues budgeted for other purposes to combat the COVID-19 emergency. Those that have managed “pre-pandemic” budgets well should not be penalized by those that have not, he said.

“That would be very unfair to the states that have done it well,” he said. “And so I think, if you’re going to make a state whole from pre-pandemic, that’s one thing. But to go beyond that and to bail out pensions or do things like that, a lot of these states weren’t being managed properly.”

All 100 U.S. senators convened in their Capitol chamber in Washington on Monday afternoon and were expected to discuss the prospective state/city COVID-19 assistance package before the House returns May 11.

Sens. Bill Cassidy (R-Louisiana) and Bob Menendez (D-New Jersey) said last week they would introduce a bill to create a $500 billion “stabilization fund” for states and local governments to replace lost revenues during the coronavirus pandemic.

“Senator Menendez’s state and mine were hit hard by the COVID-19 epidemic,” Cassidy said, referring to the Louisiana Legislature’s projected $500 million budget shortfall. “We worked hard to make sure state and local governments can maintain essential services necessary for employees and employers to survive.”

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