Gov. Kate Brown has praised the proposal by President Joe Biden for another round of federal aid to deal with the coronavirus pandemic, including direct aid to states and communities.
But she said there’s one big catch: Congress, with tenuous Democratic majorities, still has to pass the $1.9 trillion requested by the president.
“This is an extremely significant proposal — I said mind-blowing,” Brown said at a virtual legislative preview sponsored by the Associated Press. “I think the real challenge is how we get it passed.”
Brown said the plan contains not only direct aid for states, but also for specific programs for virus testing and contact tracing, personal protective equipment for health care and other essential workers, vaccine distribution, child care and reopening of schools.
Oregon’s share of direct aid could be $3.5 billion, based on the $1.4 billion from the total of $150 billion provided to states from the federal CARES Act last year. A spokesman for Brown said later that direct aid would be in addition to federal money for specific purposes listed above.
Brown said Biden’s team informed the governors about the plan before it was disclosed, and the governors conducted a conference call afterward to discuss details and build support.
Brown has been urging such aid for months as a follow-up to the CARES Act.
Though Brown proposed a 2021-23 state budget of $25.6 billion from the tax-supported general fund and lottery proceeds — about $2 billion more than projected in the two-year cycle ending June 30 — she has acknowledged it’s still short of meeting needs and covering unaccounted-for costs of the pandemic and the resulting economic downturn.
Lawmakers must complete budget work by June 30.
Although state economists’ early projections of sharp reductions in tax collections for the current two-year cycle did not materialize, mostly because the CARES Act has provided billions for individuals and businesses, they also indicate slower growth in tax collections as Oregon emerges from the economic downturn this year. They said the timing of economic recovery will hinge on the pace of vaccinations against the coronavirus and the return of consumer confidence for dining out, entertainment and travel.
Political tussle ahead
Biden’s plan proposes a total of $350 billion in new direct aid to state and local governments, less than the $500 billion requested by the National Governors Association and included as part of a $3.4 trillion plan approved by the Democratic-controlled House last year as its follow-up to the CARES Act.
The Republican majority in the Senate, however, balked at any more aid to states beyond the $150 billion in the CARES Act. Then-Majority Leader Mitch McConnell said the money would amount to a fiscal bailout for states with Democratic governors.
Democrats sacrificed state aid, and Republicans dropped their demand for a liability shield for businesses against COVID-19 lawsuits, in the final $900 billion plan that Congress passed Dec. 22 and President Donald Trump signed Dec. 27. That plan was attached to $1.4 trillion to keep the federal government running through Sept. 30.
But Brown says there is no division between Democratic and Republican governors, whose new state budgets are likely to be unbalanced without aid. New York Democrat Andrew Cuomo and Arkansas Republican Asa Hutchinson lead the governors’ association.
“They have created an effort to make sure the governors are working together and rowing in the same direction to get the package passed,” Brown told reporters at the Jan. 15 briefing.
Democrats maintained a majority in the House, but just barely above the 218 required for control. They gained a 50-50 tie in the Senate after unseating two Republicans in a pair of runoffs Jan. 5 in Georgia, which has certified its elections, and Democrats will be the majority party with the tie-breaking vote of Vice President Kamala Harris.
The $1.4 billion Oregon got in direct aid from the CARES Act went into a special coronavirus relief fund controlled by the Emergency Board, which meets between sessions of the full Legislature. It set aside $200 million for reimbursable expenses by local governments other than Portland, Multnomah County and Washington County, which split $247 million they got directly from the U.S. Treasury because of their population sizes.
Local officials protested state lawmakers’ retention of most of the $1.4 billion, arguing that local governments should have received shares equal to around 45% of the total, as suggested by U.S. Treasury guidelines. But the shares were not mandated by the CARES Act, and lawmakers rebuffed the request.
The CARES Act originally required states to spend the money by Dec. 30. Congress, in approving the follow-up plan last month, extended that deadline by one year.
Congress can decide, if it approves Biden’s plan or something else, how state and local aid is distributed.
More than a decade ago, when Congress passed a $787 billion stimulus plan during the Great Recession — the amount is less than half of what Biden, vice president back then, is asking for now — Oregon and other states received direct aid in two forms.
One was an increase in the federal share of Medicaid, the joint federal-state program of health insurance for low-income people. About 1 million people are covered by the Oregon Health Plan. Oregon put the rest in the state school fund, which is distributed to Oregon’s 197 school districts. A second smaller round of aid went to states in mid-2010.