Governors, Mayors Warn of Big Spending Cuts Without New Aid
(Bloomberg) -- After Senate Republicans balked at extending new federal aid to help cover states’ and cities’ swelling budget shortfalls, governors and mayors warned that they’re facing drastic spending cuts that will put the nation’s economic recovery at risk.
Senate Majority Leader Mitch McConnell and other top Republicans on Monday released a $1 trillion package, setting off negotiations with Democrats. The plan doesn’t include additional funding to address states and local government budget deficits, a stark contrast to the approximately $1 trillion that Democrats included in the bill the House passed in May. It does loosen restrictions on the use of previously allocated funds and would provide about $105 billion in funds for schools and $16 billion for expenses tied to Covid-19 testing.
But without broader aid from Washington, the budget crisis building in state capitals and city halls threatens to worsen the economic downturn by forcing governments to cut spending deeply, fire workers or raise taxes. After the last recession over a decade ago, such steps exerted a major drag on the recovery for more than two years, according to Commerce Department figures.
New York Governor Andrew Cuomo said the state would be forced to slash aid to localities, hospitals, and schools by 20% without federal aid. State revenues in New York have been decimated, he said.
https://www.msn.com/en-us/money/other/governors-mayors-warn-of-big-spending-cuts-without-new-aid/ar-BB17fRxl?li=BBnbfcQ&ocid=DELLDHP
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