F ED ERA L BUD G ET ASSISTANCE FO R STATE & LO CAL GOVERNME NTS

FEDERAL
BUDGET
ASSISTANCE
FOR STATE & LOCAL GOVERNMENTS

By Matthew D. Dickerson & Alison Winters

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Key Points
The federal government will be providing at least $1.9 trillion in total
assistance to states and local governments this year. That includes $790.7
billion in grants to state and local governments in pre-COVID funding,
plus $1.1 trillion in additional support for state and local governments
in response to COVID-19.

This massive and unprecedented amount of federal funds, combined
with other federal support programs and responsible decision making
on the part of state and local policymakers, should allow states and local
governments to provide essential services.

Calls for even more federal bailouts for states should be rejected. Instead,
in addition to the current federal support being provided to states, state
lawmakers must enact reforms and spending reductions, and take other
measures—such as using rainy-day funds—to address state budget challenges, many of which are the result of fiscal mismanagement prior to
the COVID-19 crisis.

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Overview

The level of federal assistance being made available to state and local governments in 2020 is
truly extraordinary. To date, $1.9 trillion in support for state and local budgets is being made
available by the federal government. This includes $1.1 trillion in support in response to
COVID-19 as well as $791 billion in grants under the pre-COVID-19 budget.

Federal Support for State and Local Governments1
( IN BILLIO NS O F DO LLARS)
2000

1500

1000

500

0

2000 2001

2002 2003 2004 2005 2006 2007 2008 2009 2010

2011

Grants to State and Local Governments

2012

2013

2014

2015

2016

2017

COVID Assistance

This level of federal aid will have serious implications for core foundational principles of the
United States, including federalism, moral hazard, and the need to be fiscally responsible.
Despite the assistance that is already available, some politicians and special interests are
pushing for more bailouts, even up to $1 trillion in more federal spending for states. These
additional bailouts are not just bad policy, they are unnecessary, and should be rejected.

03

2018

2019

2020

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PRE-COVID-19 ASSISTANCE TO
STATE AND LOCAL GOVERNMENTS
In the pre-COVID-19 Fiscal Year 2020 budget, the federal government was already providing
an estimated $790.7 billion in grants to state and local governments. This significant level
of financial assistance was being provided through 181 different federal programs.2 Total
grants to state and local governments have increased by 27 percent from 2015 to the preCOVID-19 FY 2020 budget.3
The largest program providing aid to state budgets is Medicaid, costing federal taxpayers
an estimated $447 billion in grants to states prior to COVID-19 in FY 2020. Other large
programs include federal aid for highways, K-12 education, child nutrition programs, Section
8 housing assistance, the Temporary Assistance for Needy Families (TANF) program, and
subsidies for local mass transit.
Federal funds make up a significant portion of state budgets. In Fiscal Year 2019, federal
funds comprised 30.7 percent of total state budgets.4

State Own Funds

2019 State
Budgets

Federal Funds

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COVID-19 ASSISTANCE TO
STATE AND LOCAL GOVERNMENTS
In the wake of the COVID-19 outbreak, the federal government has provided an unprecedented level of support for state and local governments. In addition to previously appropriated
funds, the federal government is providing more than $1.1 trillion in other support for state
and local governments in response to COVID-19.

SOURCE OF
ASSISTANCE5

ASSISTANCE FOR STATE AND LOCAL GOVERNMENT6

ASSISTANCE,
IN BILLIONS7

FFCRA

Increase Medicaid matching funds to states

$50

FFCRA

Allow states to increase SNAP benefits, waive work requirements

$21

FFCRA

Fund extended unemployment benefits past 26 weeks

$5

FFCRA

Increase funding for nutrition programs

$1

CARES

Expand Unemployment Benefits - expand eligibility, increase
benefits by $600/week, extend 13 weeks, and other changes

$268

CARES

Provide aid to states for pandemic-related costs (Coronavirus Relief Fund)

$150

CARES

Expand FEMA Disaster Assistance Fund for COVID-19

$45

CARES

Establish Education Stabilization Fund for states

$31

CARES

Issue infrastructure grants to transit providers, including state & local governments

$25

CARES

Increase SNAP & child nutrition funding

$25

CARES

Boost housing support

$12

CARES

Provide grants to publicly-owned commercial airports

$10

CARES

Increase child & family services funding

$5

FED/CARES

Municipal Liquidity Facility

$500

TOTAL

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$1,148

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Some of these funds, such as the funding for increased
unemployment benefits, are being provided to the states
for the purpose of subsequently passing them on to other
beneficiaries. These funds still subsidize the budget of the
states that receive them, and these types of programs are
generally counted by the Office of Management and Budget
as grants to state and local governments.8 Money is fungible,
and these additional resources allow the recipients to divert
funds that would have otherwise been used to other purposes. For instance, in the case of Unemployment Insurance,
the federal government is fully funding benefits that would
normally partially be borne by the state governments.

would then reduce the state’s share). The money is supposed
to only be used for “necessary expenditures incurred due to
the public health emergency with respect to COVID-19”,
through December 30, 2020, that were “not accounted for in
the budget most recently approved”.9 This is an open-ended
invitation for states to spend on new programs, projects, and
activities on the federal the backs of federal taxpayers.
The Federal Reserve has used its Section 13(3) emergency
powers to establish a new Municipal Liquidity Facility
on April 9, 2020. This Facility will purchase up to $500
billion in debt issued by states, counties, and cities. The
Facility is backed by $35 billion from the Treasury provided
by the CARES Act. Since the original announcement of
the Municipal Liquidity Facility, the Federal Reserve has
expanded the scope and duration of the Facility to cover
additional local governments.10 Under this Facility, the Federal reserve will purchase debt from a state, county with
at least 500,000 residents, or city with at least 250,000
residents, up to an amount equal to 20 percent of the state
or local government’s 2017 general revenue.11 This is the
first time the Federal Reserve has engaged in the direct
purchase of municipal bonds.12 While some states currently
have restrictions on the issuance of new debt, this assistance
is available for states that chose to take advantage of it.

Much of the assistance is being provided to states through
additional funding for existing programs for specific purposes, such as Unemployment Insurance or Medicaid. However, two major funding streams, the Coronavirus Relief Fund
and the Municipal Liquidity Facility, are novel programs
that are meant to provide flexible, general budgetary support
to state and local governments.
The CARES Act established a new $150 billion Coronavirus
Relief Fund to provide money to states and local governments. The states will automatically get funds based on
population, while local governments can request it (which

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Flexible Assistance Available to
State Governments Under Select Programs
CORONAVIRUS RELIEF FUND:
PAYMENTS TO STATES13

FEDERAL RESERVE
MUNICIPAL LIQUIDITY FACILITY:
MAX ELIGIBLE NOTES14

Alabama

$1,786,346,250

$3,364,400,000

Alaska

$1,250,000,000

$1,015,300,000

Arizona

$1,856,987,708

$4,197,400,000

Arkansas

$1,250,000,000

$2,637,100,000

California

$9,525,564,744

$39,326,800,000

Colorado

$1,673,849,579

$3,886,100,000

Connecticut

$1,382,477,973

$4,131,200,000

Delaware

$927,233,331

$1,206,300,000

Florida

$5,855,807,380

$11,659,900,000

Georgia

$3,502,871,330

$5,748,300,000

Hawaii

$862,823,979

$2,132,800,000

Idaho

$1,250,000,000

$1,178,900,000

Illinois

$3,518,945,366

$9,676,700,000

Indiana

$2,442,177,436

$4,806,900,000

Iowa

$1,250,000,000

$3,538,900,000

Kansas

$1,034,052,050

$2,705,000,000

Kentucky

$1,598,594,564

$3,395,700,000

Louisiana

$1,802,619,343

$2,985,300,000

Maine

$1,598,594,564

$1,113,700,000

Maryland

$1,802,619,343

$5,670,000,000

Massachusetts

$2,460,842,294

$7,859,000,000

Michigan

$3,080,689,545

$8,534,200,000

Minnesota

$1,869,920,708

$6,115,000,000

Mississippi

$1,250,000,000

$2,157,800,000

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Missouri

$1,250,000,000

$3,646,600,000

Montana

$2,083,701,913

$717,700,000

Nebraska

$1,083,865,742

$1,374,900,000

Nevada

$836,051,100

$2,016,800,000

New Hampshire

$1,250,000,000

$872,200,000

New Jersey

$2,393,851,157

$9,249,200,000

New Mexico

$1,067,817,494

$1,897,800,000

New York

$5,135,624,853

$21,907,900,000

North Carolina

$3,585,391,176

$7,291,300,000

North Dakota

$1,250,000,000

$946,300,000

Ohio

$3,754,114,827

$8,895,300,000

Oklahoma

$1,259,072,820

$2,874,700,000

Oregon

$1,388,506,837

$4,057,700,000

Pennsylvania

$3,935,169,363

$10,932,200,000

Rhode Island

$1,250,000,000

$1,043,900,000

South Carolina

$1,905,114,601

$3,758,100,000

South Dakota

$1,250,000,000

$547,900,000

Tennessee

$2,363,433,874

$3,624,200,000

Texas

$8,038,314,291

$16,703,600,000

Utah

$934,765,677

$2,677,400,000

Vermont

$1,250,000,000

$819,900,000

Virginia

$3,109,502,836

$7,306,900,000

Washington

$2,167,079,311

$6,625,100,000

West Virginia

$1,250,000,000

$1,547,700,000

Wisconsin

$1,997,294,786

$5,195,300,000

Wyoming

$1,250,000,000

$592,200,000

TOTAL

$111,373,744,508

$266,165,500,000

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 F ED ERA L BUD G ET ASSISTANCE FO R STATE & LO CAL GOVERNME NTS

State and local bailouts
aren’t just bad policy–
they aren’t needed.

Even if federal bailouts were acceptable policy options,
additional funding may not even be warranted. A recent
report from Moody’s Investors Service estimates that state
tax revenues will decline by $160 billion between FY 2019
and FY 2021.15 The Center for Budget and Policy Priorities
projects state budget shortfalls totaling up to $460 billion
for FY 2020 and FY 2021.16 Even if local tax revenue
declines are similar in magnitude, it is unlikely additional
funds to ensure liquidity would be needed, especially if
paired with responsible spending reductions and use of
rainy day funds.17

With the payments to states under the Coronavirus Relief
Fund and the Federal Reserve’s commitment to purchase state
debt through the Municipal Liquidity Facility, the federal
government has provided more than $377 billion in flexible
assistance related to COVID-19 as a part of the nearly $2
trillion in federal assistance to state and local governments
being made available in FY 2020. Combined with the state
rainy day fund balances, state governments have more than
$450 billion in liquidity available to address budgetary needs.
This level of federal support is significant compared to state
budgets. States collectively spent just over $1.4 trillion using
their own revenue sources in Fiscal Year 2019. This means
that the flexible federal assistance already provided to states
represents more than 26 percent of what states spent in
2019 using their own funds.

In Fiscal Year 2019, states held a total of $74.9 billion
in rainy day funds, which are “established to supplement
general fund spending during a revenue downturn or other
unanticipated shortfall.”18

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Liquidity Available for States: State Rainy Day Funds and
Flexible Assistance Available to State Governments Under Select Programs
Flexible Federal
Assistance as
% of 2019 State
Own Funds
Expenditures22

Liquidity as %
of 2019 State
Own Funds
Expenditures

$5,998,746,250

31.69%

36.90%

$2,265,300,000

$4,553,300,000

29.30%

58.90%

$713,000,000

$6,054,387,708

$6,767,387,708

27.36%

30.58%

Arkansas

$153,000,000

$3,887,100,000

$4,040,100,000

21.73%

22.59%

California

$20,646,000,000

$48,852,364,744

$69,498,364,744

23.96%

34.08%

Colorado

$1,140,000,000

$5,559,949,579

$6,699,949,579

17.45%

21.03%

Connecticut

$2,506,000,000

$5,513,677,973

$8,019,677,973

22.13%

32.19%

Delaware

$240,000,000

$2,133,533,331

$2,373,533,331

24.74%

27.52%

Florida

$1,483,000,000

$17,515,707,380

$18,998,707,380

30.28%

32.84%

Georgia

$2,557,000,000

$9,251,171,330

$11,808,171,330

24.39%

31.13%

Hawaii

$378,000,000

$2,995,623,979

$3,373,623,979

24.82%

27.95%

Idaho

$373,000,000

$2,428,900,000

$2,801,900,000

40.27%

46.46%

Illinois

$4,000,000

$13,195,645,366

$13,199,645,366

24.17%

24.18%

Indiana

$1,436,000,000

$7,249,077,436

$8,685,077,436

35.36%

42.36%

Iowa

$762,000,000

$4,788,900,000

$5,550,900,000

28.10%

32.57%

Kansas

$0

$3,739,052,050

$3,739,052,050

29.65%

29.65%

Kentucky

$129,000,000

$4,994,294,564

$5,123,294,564

22.53%

23.11%

Louisiana

$405,000,000

$4,787,919,343

$5,192,919,343

23.41%

25.39%

Maine

$309,000,000

$2,363,700,000

$2,672,700,000

40.29%

45.55%

Maryland

$877,000,000

$7,323,268,271

$8,200,268,271

23.09%

25.85%

Massachusetts

$2,832,000,000

$10,319,842,294

$13,151,842,294

24.20%

30.84%

Michigan

$1,149,000,000

$11,614,889,545

$12,763,889,545

34.04%

37.40%

Minnesota

$2,474,000,000

$7,984,920,708

$10,458,920,708

27.06%

35.45%

Mississippi

$348,000,000

$3,407,800,000

$3,755,800,000

28.99%

31.95%

State Rainy Day
Fund Balances,
Fiscal Year 201919

Total, Flexible
Federal Assistance
for COVID-1920

Alabama

$848,000,000

$5,150,746,250

Alaska

$2,288,000,000

Arizona

Liquidity

21

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 F ED ERA L BUD G ET ASSISTANCE FO R STATE & LO CAL GOVERNME NTS

Missouri

$651,000,000

$4,896,600,000

$5,547,600,000

27.47%

31.13%

Montana

$61,000,000

$2,801,401,913

$2,862,401,913

66.86%

68.32%

Nebraska

$334,000,000

$2,458,765,742

$2,792,765,742

26.39%

29.97%

Nevada

$332,000,000

$2,852,851,100

$3,184,851,100

29.44%

32.87%

New Hampshire

$115,000,000

$2,122,200,000

$2,237,200,000

55.51%

58.52%

New Jersey

$401,000,000

$11,643,051,157

$12,044,051,157

25.27%

26.15%

New Mexico

$1,868,000,000

$2,965,617,494

$4,833,617,494

25.19%

41.06%

New York

$2,048,000,000

$27,043,524,853

$29,091,524,853

26.02%

27.99%

North Carolina

$1,254,000,000

$10,876,691,176

$12,130,691,176

29.66%

33.08%

North Dakota

$659,000,000

$2,196,300,000

$2,855,300,000

44.78%

58.21%

Ohio

$2,692,000,000

$12,649,414,827

$15,341,414,827

23.96%

29.06%

Oklahoma

$806,000,000

$4,133,772,820

$4,939,772,820

26.87%

32.11%

Oregon

$1,288,000,000

$5,446,206,837

$6,734,206,837

17.30%

21.39%

Pennsylvania

$23,000,000

$14,867,369,363

$14,890,369,363

25.51%

25.55%

Rhode Island

$204,000,000

$2,293,900,000

$2,497,900,000

35.78%

38.96%

South Carolina

$531,000,000

$5,663,214,601

$6,194,214,601

32.45%

35.49%

South Dakota

$170,000,000

$1,797,900,000

$1,967,900,000

59.73%

65.38%

Tennessee

$875,000,000

$5,987,633,874

$6,862,633,874

26.43%

30.29%

Texas

$10,089,000,000

$24,741,914,291

$34,830,914,291

34.38%

48.40%

Utah

$697,000,000

$3,612,165,677

$4,309,165,677

30.07%

35.87%

Vermont

$224,000,000

$2,069,900,000

$2,293,900,000

53.60%

59.40%

Virginia

$792,000,000

$10,416,402,836

$11,208,402,836

24.50%

26.37%

Washington

$1,671,000,000

$8,792,179,311

$10,463,179,311

24.32%

28.95%

West Virginia

$753,000,000

$2,797,700,000

$3,550,700,000

21.07%

26.74%

Wisconsin

$649,000,000

$7,192,594,786

$7,841,594,786

18.70%

20.39%

Wyoming

$1,667,000,000

$1,842,200,000

$3,509,200,000

47.68%

90.82%

TOTAL

$74,904,000,000

$377,539,244,508

$452,443,244,508

26.43%

31.69%

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More Bailout Proposals

Despite the nearly $2 trillion in aid to state and local governments the federal government is already providing, some
politicians and special interests are calling for even more.

governments divided using three methods, with:
1.  “One-third to eligible entities based on population size
to ensure they each receive additional federal resources
to meet their growing needs (Same formula used to
disburse the $150 billion state stabilization fund created in the CARES Act, but essentially doubles those
available funds)
2.  One-third to eligible entities based upon the number
of COVID-19 cases relative to the U.S. population to
target the urgent public health challenge
3.  One-third to eligible entities based upon state revenue
losses relative to pre-COVID-19 projections to target
the urgent economic challenge”.25

Speaker Nancy Pelosi has called for “almost $1 trillion” in
additional bailouts for state and local governments.23 Congressional Democrats have previously advocated for varying
amounts of additional state and local bailouts, ranging from
$200 billion to $750 billion.24
H.R. 6800, the ‘Health and Economic Recovery Omnibus
Emergency Solutions Act, was introduced by House Democrats on May 12, 2020. This massive $3 trillion package
would provide nearly $1 trillion in direct bailouts to state
and local governments in addition to significant additional
funding through other programs. The bill would provide
$500 billion to states, $375 billion to local governments,
and $20 billion to territories to “respond to, mitigate, cover
costs or replace foregone revenues not projected on January
31, 2020 stemming from the public health emergency, or
its negative economic impacts”.

The National Governors Association has requested $500
billion in additional assistance to states.26 The National
Association of Counties, the National League of Cities, and
the U.S. Conference of Mayors have also requested another
$250 billion for local governments.27
Public sector labor unions, including the American Federation of State, County & Municipal Employees, the
National Education Association, the American Federation
of Teachers and the Service Employees International Union
have called for $700 billion in bailouts for state and local
governments, including $300 billion in “unrestricted aid”.28

A bipartisan proposal to aid states is the State and Municipal Aid for Recovery and Transition (SMART) Fund put
forward by Senators Bill Cassidy and Bob Menendez. This
proposal would provide $500 billion to state and local

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These calls
for more
bailouts
should be
rejected.

13

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Under the Constitution, all powers not granted to the federal
government are reserved to the people and the states (unless
expressly prohibited.) This includes fiscal policy. States have
broad power to tax, spend, make contracts and issue debt.
States also have the power to cut spending (or even raise
taxes) in order to balance their budgets responsibly.

the future, including by enacting a well-structured constitutional tax and spending limit, budgeting for outcomes,
fully funding their pension systems, and increasing rainy
day funding.
Even if after taking prudent budget actions state lawmakers
still believed they needed additional funding, they should
utilize the private sector bond markets. This would incentivize lawmakers to weigh the consequences of all their fiscal
decisions and the tradeoffs in issuing more debt with the
risk on their own state taxpayers to pay off that debt. There
is already a robust bond market for state and local governments, and while taking on additional debt for ongoing
operations may raise some eyebrows in the bond markets,
the threat of higher debt pricing should also incentivize
lawmakers to ensure they are following sound fiscal policy.

When the federal government expands beyond its proper role
and bails out the states, it can lead to fiscal irresponsibility on
the part of the states. Instead of states properly funding rainy
day funds or budgeting judiciously, they grow increasingly
dependent upon a model of asking the federal government to
bail them out. According to the Government Accountability
Office (GAO), states have become “less concerned” about
adequate fiscal planning for disasters and other emergencies
“because they relied on the federal government to provide
most of the funding for recovery efforts.”29 Federal funds
are also not an effective way for states to avoid tax increases
on their citizens, as one study has found that “for every
dollar the federal government sends to the states, states’ own
future taxes increase by between 33 and 42 cents.”30 These
bailouts will “set a dangerous precedent for future bailouts,”
including for states that have irresponsibly underfunded
their failing pension systems for years.31

Federal bailouts are inefficient and unfair. Taxpayer money
should not have to go through a bureaucratic system in
Washington before getting redistributed according to political considerations instead of simply allowing those funds
to stay with the people who earned them.
The federal government was already on an unsustainable budgetary path, even before the COVID-19 crisis. Total national
debt has grown to more than $25 trillion. The Congressional
Budget Office preliminarily projects that the federal deficit
will be $3.7 trillion in FY 2020, assuming no legislation further adds to the deficit.32 Over the next decade, the response
to COVID-19 and economic downturn are “projected to add
nearly $8 trillion to the national debt, pushing the debt held
by the public to $41 trillion within a decade, or 128% of the
economy.” This would be a record, higher even than the levels
reached even during World War II.33 As Congress continues
to grapple with COVID-19, it should weigh the tradeoffs
of the economic consequences of COVID-19 restrictions
and public health. It must also take steps to minimize the
impact COVID-19 relief will have on the debt, including
by rejecting irresponsible bailouts of states.

The Constitution does not charge the federal government
with maintaining state budgets during bad times. Indeed,
state governments—as laboratories of democracy—are free
to enjoy the fruits of their policies in the good times, but
to bear the costs in hard times. States should be responsible
for expenses incurred by the states. It is incumbent on politicians to enact responsible fiscal policies in both good and
hard times and voters will hold them accountable.
Instead of asking Washington for bailouts, state lawmakers
should govern responsibly by finding savings in current
budgets, including by ending corporate welfare spending.
They should also implement important budget reforms to
ensure the long-term solvency of their state and prepare for

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Conclusion

Bailouts are a clear example of the federal government overstepping its authority. It is incumbent
on states to govern wisely and independently, both
reaping the rewards of smart policy, and addressing
the consequences of bad.
The federal government has already provided an
unprecedented level of assistance to state and local
governments. More federal bailouts of state and
local governments should be rejected.

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ENDNOTES

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14 

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17 

18 

Office of Management and Budget, Historical Tables, Table 12.3, accessed April 30, 2020; and Committee for a Responsible
Federal Budget, COVID Money Tracker: Policies Enacted To Date, updated April 20, 2019.
Office of Management and Budget, Historical Tables, Table 12.3, accessed April 30, 2020.
Office of Management and Budget, Historical Tables, Table 12.3, accessed April 30, 2020.
National Association of State Budget Officers, 2019 State Expenditure Report.
FFCRA = Families First Coronavirus Response Act; CARES = Coronavirus Aid, Relief, and Economic Security (CARES)
Act; Fed = Federal Reserve
Accounting of assistance to states is necessarily incomplete given differing interpretations of what should be counted as aid
to state and local governments, uncertainty with how certain funding streams will be used, incomplete scoring estimates, and
the scope of federal spending – more than $3 trillion. For instance, the Tax Foundation states that “As much as $535 billion
of the nearly $3 trillion the federal government has already appropriated flows through to states and localities,” a figure which
includes $100 billion for Hospital and Health Care Provider Reimbursements, although payments from the Public Health
and Social Service Emergency Fund are currently being made by the Secretary of Health and Human Services directly to
healthcare providers, and which excludes certain other assistance being provided to states. The President has also declared
an emergency under the Stafford Act, which may allow additional funds to be provided to state and local governments.
Jared Walczak, Tax Foundation, Designing a State and Local Government Relief Package, May 12, 2020. Other direct aid
to businesses and individuals by the federal government will also provide an indirect subsidy to state and local budgets by
propping up income levels and thus tax receipts by state and local governments. Rachel Greszler, Heritage Foundation, 3
Reasons Why States Shouldn’t Get a Congressional Bailout, April 20, 2020.
Dollar figures from Committee for a Responsible Federal Budget, COVID Money Tracker: Policies Enacted To Date, updated
April 20, 2019.
Office of Management and Budget, Historical Tables, Table 12.3, accessed April 30, 2020.
Title V of Public Law 116-136, the Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act”.
Federal Reserve, Federal Reserve Board announces an expansion of the scope and duration of the Municipal Liquidity Facility,
April 27, 2020.
Federal Reserve Bank of New York, FAQs: Municipal Liquidity Facility, April 27, 2020.
Kellie Mejdrich and Victoria Guida, Politico, Fed to buy municipal debt for first time, underscoring peril facing cities, April
9, 2020.
U.S. Treasury, Payments to States and Eligible Units of Local Government, May 11, 2020.
This figure represents the maximum amount of debt issued by the state government that the Municipal Liquidity Facility
may purchase under guidelines issued by the Federal Reserve. It does not represent actual purchases made. Federal Reserve
Bank of New York, FAQs: Municipal Liquidity Facility Appendix A, Effective April 27, 2020.
James Nani, Law360, Moody’s Says States Face $160B Tax Loss From COVID-19, April 28, 2020.
Michael Leachman, Center for Budget and Policy Priorities, New CBO Projections Suggest Even Bigger State Shortfalls,
April 29, 2020.
In 2017, revenues by local governments totaled about 83 percent of revenue collections by state governments. However, local
governments are much more reliant on property taxes instead of sales or income taxes, and thus local revenues are likely to
be less sensitive to the economic downturn compared to state revenues. U.S. Census Bureau, Annual Survey of State and
Local Government Finances, 2017 Data Release, Last Revised: October 30, 2019.
National Association of State Budget Officers, Fiscal Survey of the States, Fall 2019.

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 F ED ERA L BUD G ET ASSISTANCE FO R STATE & LO CAL GOVERNME NTS

19 
20 
21 
22 
23 
24 

25 
26 
27 
28 
29 
30 
31 
32 
33 

National Association of State Budget Officers, Fiscal Survey of the States, Fall 2019. Note: FY 2019 data for Georgia is not
available; the figure shown reflects FY 2018.
Includes Payments to States under the Coronavirus Relief Fund and Max Eligible Notes under the Federal Reserve’s Municipal
Liquidity Facility, detailed in the table above.
Equals the sum of the state’s rainy day fund balance and the flexible federal assistance.
State Own Fund Expenditures includes general funds plus other state fund spending and excludes federal funds and spending
from bonds. National Association of State Budget Officers, 2019 State Expenditure Report.
Speaker Nancy Pelosi, Transcript of Pelosi Weekly Press Conference Today, April 30, 2020.
House Appropriations Committee, House Democrats Introduce Take Responsibility for Workers and Families Act, March
23, 2020; and Alexander Bolton, The Hill, Democrats asked for $750B in state stabilization funds in coronavirus stimulus,
March 21, 2020.
Senators Bill Cassidy and Bob Menendez, Cassidy, Menendez Announce Bipartisan Breakthrough to Deliver Federal Resources
to States, Communities on Frontline of COVID-19 Fight, April 19, 2020.
National Governors Association, National Governors Association Outlines Need For ‘Additional And Immediate’ Fiscal
Assistance To States, April 11, 2020.
National League of Cities, National Association of Counties, National League of Cities and U.S. Conference of Mayors Call
For $250 Billion Assistance Package for Local Governments, April 16, 2020.
American Federation of State, County & Municipal Employees, Saunders to Congress: Helping States, Localities Must Be
Next on Your Agenda, April 24, 2020.
General Accounting Office, Letter to the Honorable Don Nickles on Federal Assistance: Temporary State Fiscal Relief, May
7, 2004.
Matthew Mitchell, Mercatus Center, Aggregate State Spending During the Recession, March 7, 2011.
Adam Michel, Heritage Foundation, State Bailouts Create Poor Incentives, Do Not Fix Underlying Problems, April 17, 2020.
Congressional Budget Office, CBO’s Current Projections of Output, Employment, and Interest Rates and a Preliminary
Look at Federal Deficits for 2020 and 2021, April 24, 2020.
Brian Riedl, Manhattan Institute, Coronavirus Budget Projections: Escalating Deficits and Debt, April 29, 2020.

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