The COVID-19 reconciliation bill moving through Congress would provide state and local governments with $350 billion in relief, and a new analysis by the Washington Post seems to demonstrate states will need it.


On February 15, 2021, the Post published a story that shows states losing 1.3 million jobs since the start of the pandemic. State and local fiscal relief, as included in the current COVID-19 bill, has been ridiculed by some as a “blue state bailout,” arguing only “blue” states are in need of such funds, but the Post analysis indicates that, while tax revenue grew in some states, the majority or at least 26 states had declines in revenue. The declines have been in states run by either party. The biggest decline was in Alaska at 43 percent, with other large states, including Florida and Texas, losing 10 percent in revenue. Job losses have been following. New Hampshire has been hit with a job loss of 26 percent, followed by states such as Colorado (17 percent), Ohio (14 percent), and Wisconsin (13 percent). Texas and Florida have suffered job losses of 5 and 6 percent, respectively.   


The recovery from the 2008 recession slowed when Congress began to cut back on state relief and support. Total nonfarm payroll employment increased by 200,000 in December 2011, more than two years after the official end of the recession. For all of 2011, two years into recovery, nonfarm payroll employment rose by a total of 1.6 million jobs, with employment in the private sector growing by 1.9 million jobs in 2011. At the same time, government employment cut into those gains by falling by more than 280,000 in 2011. In this pandemic, states are laying off workers or offering early retirement with the vacancies not filled. These government jobs include law enforcement, teachers, sanitation workers, and firefighters. According to the Post article, the most significant reductions were with state and local education. At the local government level, half of the job eliminations are in education.  


The $350 billion in state and local relief would be split. The funding provides $219 billion to the states, territories, and Tribes. Out of this total, $4.5 billion is available to the territories, and tribal governments receive $20 billion. State funding is provided this fiscal year until spent.  An additional $130 billion is for metropolitan cities, non-entitlement units of local government, and counties. Of the $130 billion, $45 billion is designated for metropolitan areas (Department of Housing definitions), $19.5 billion is for non-entitlement local governments and passed through by the state government. The remaining $65 billion will go directly to the counties. California, the biggest state, would receive $26 billion, with local governments receiving an additional $14.9 billion. Another big state, Texas, would receive $16.8 billion with an additional $10.3 billion for local governments. Puerto Rico would receive $2.4 billion-plus $1.9 billion to local governments. For a state-by-state breakout, go to this House Committee breakout.