Denying federal aid to state, local governments could put neediest residents at risk

Like their residents, state and local governments are finding themselves cash-strapped as they contend with the novel coronavirus pandemic. Whether to provide them with more assistance is a key point of contention as negotiators on Capitol Hill work to broker a deal on the next relief package.

Where they land could have a major impact on whether millions of people keep their jobs and stay in their homes.

States rely heavily on personal income and general sales taxes, and both are expected to decline drastically through the end of the next fiscal year. By that point, the total tax revenue shortfall for all 50 states will add up to an estimated $200 billion, according to an analysis by the Tax Policy Center.

House Democrats passed legislation in May calling for $915 billion in flexible aid for state and local governments that can be spent for a wide range of purposes, including to backfill revenue losses. But Republicans have balked at running up the bill.

https://www.msn.com/en-us/news/politics/denying-federal-aid-to-state-local-governments-could-put-neediest-residents-at-risk/ar-BB17FbKS?li=BBnbcA1&ocid=DELLDHP