New York could be looking at a much-needed windfall of $23.3 billion in federal aid to the state and to local governments, under a proposal in President Joe Biden’s $1.9 trillion COVID-19 stimulus package. Under that proposal, which the House of Representatives is considering this week, roughly $12.7 billion would go directly to the state government, with another $10.6 billion going to local governments in New York.
Estimates of the funding allocations – drawing from a total pot of $350 billion in proposed aid to state and local governments nationwide – were provided by the House Committee on Oversight and Reform. Those estimates show that New York City would be allocated a total of roughly $5.6 billion in aid. Smaller cities across the state would receive their own sizable allocations; $324 million is earmarked for the city of Buffalo and Rochester would receive $191 million.
“As our nation continues to combat the coronavirus pandemic, Congress must take bold, urgent action to confront this crisis and show the American people that help is on the way,” Rep. Carolyn Maloney, the New York Democrat who chairs the House Oversight committee, said in a press release. “This week, the Oversight and Reform Committee will consider legislation to provide direct funding to state and local governments striving to deliver critical services to struggling families and save the jobs of essential public servants like teachers, firefighters, and other first responders during the coronavirus pandemic.”
Since the onset of the coronavirus pandemic nearly a year ago, state and local governments have been pummeled by the high costs of fighting the spread of the virus and plummeting revenues. New York state faces an estimated $60 billion budget deficit over the next four years, and Gov. Andrew Cuomo has called for Congress’ COVID-19 stimulus package to deliver $15 billion in aid to the state government. That number, Cuomo has said, would help avoid cuts to education spending, tax hikes and layoffs. The allocation included in the current version of the relief bill falls about $2.4 billion shy of Cuomo’s request. However, Biden’s proposal far exceeds the approximately $0 in state and local aid that was expected if Republicans had retained control of the White House or the U.S. Senate.
New York City faces its own projected budget deficit of roughly $5 billion in the next fiscal year, Mayor Bill de Blasio said last month. The federal relief plan would deliver just over $4 billion to the city government.
The funding awards to states and localities are intended to be used to help governments recover from and respond to the pandemic. The proposed legislation says the funds should only be used to respond to or mitigate the COVID-19 public health emergency, cover costs related to the emergency, replace lost revenue related to the pandemic or address the economic impact of the pandemic.
The final version of Biden’s American Rescue Plan – the broader $1.9 trillion COVID-19 relief package – is still being drawn up in Congress, and the allocations for state and local governments are just estimates. It’s possible those estimates will vary, or that the amounts will change, possibly shrinking to win over the votes of moderates or senators from small, rural states. A spokesperson for Maloney – whose committee is drawing up that aspect of the relief package – did not comment on how much these figures might change. Democrats in Congress have signaled their intention to advance the relief package despite resistance from Republicans.