September 10, 2020

Lujan Grisham: States need more fiscal help from DC for COVID-19 recovery

Capitol Hill Building, Washington DC

During a hearing of the House Committee on Financial Services, Gov. Michelle Lujan Grisham and other governors from across the country asked for more aid from the federal government because of the costs incurred from dealing with COVID-19, and said if none comes that the results would be dire.

Lujan Grisham, speaking from New Mexico during the online session, described spending $400 million in direct COVID-19 costs including PPE and testing materials, $520 million in costs for K-12 education and much more indirect costs already incurred and an “exponential” loss in tax revenue because of the pandemic.

“These are not static data points,” she said. “The pandemic is ongoing, the storm is raging and those winds of fiscal damage are not dying down.”

She said that without more federal aid to “replace and backfill lost revenue” the state would need to make “drastic, difficult cuts to essential services.”

Lujan Grisham said that aid needs to be sent to small businesses and local governments, noting that grants are better for small businesses since those in New Mexico largely cannot afford to add on more debt. She also said the state has delivered more than $2 billion in unemployment benefits, including emergency funds made available by the federal government, but that the trust fund that provides funding from the state is “depleted” and needs help to be replenished.

“We all know, and I know, that tightening our belts in the coming months and years is critical. And indeed in some states, including New Mexico, we already have,” Lujan Grisham said. “But these cost-cutting measures will not be enough to weather the storm. An umbrella is not enough protection in a hurricane and the rubber will meet the road in homes all across states like mine where families, children and workers may be left without.”

She mentioned that the state had a record number of reserves and still faces economic problems because of the COVID-19 pandemic.

It all comes as further COVID-19 aid has stalled in the Senate. 

All but one Republican—Kentucky’s Rand Paul opposed the effort—voted for a $300 billion COVID-19 aid package put to a vote on Thursday, while all Democrats who were present—Kamala Harris of California did not vote—voted against. 

The effort was a small fraction of the more-than $3 trillion COVID-19 aid package that the House passed in May, largely along party lines.

Democrats have control of the House, while Republicans have control of the Senate. But, because of Senate filibuster rules, nearly all legislation needs a 60-vote majority to pass.

Republicans in the House hearing on Thursday expressed skepticism that any further legislation would pass the House, let alone any that would be palatable to the more conservative Senate.