(CN) — A collection of lawmakers and governors from Western states told congressional leaders that their states, cities and counties will need $1 trillion in federal money to weather the economic downturn created by the coronavirus pandemic.
In a letter sent to Senate leaders Mitch McConnell and Chuck Schumer, as well as House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, leading legislators and the governors of California, Oregon, Washington state, Nevada and Colorado said the trillion-dollar infusion is necessary to prevent layoffs and preserve services and public safety.
“Though even this amount will not replace the decline in revenue that we forecast, it will make a meaningful difference in our ability to make-up for Covid-19 revenue losses,” the letter states. “This aid would preserve core government services like public health, public safety, public education and help people get back to work.”
California Gavin Newsom said during his daily coronavirus press briefing Monday that California’s budget will likely experience such substantial shortfalls that even fundamental public safety services in the state could be curtailed.
“It will directly impact public safety,” Newsom said. “It will directly impact our firefighters, police officers and first responders.”
The five states have collaborated on several issues, including the procurement of personal protective equipment and attempts to coordinate the public health response to make sure the western portion of the United States is aligned in the response to the Covid-19 pandemic.
Newsom, in particular, has said the federal government will need to provide stimulus funds to states given the downturn since only the federal government can borrow against its own future because states are required to balance their annual budgets.
“California has spent 13.4 billion on unemployment insurance since March 12,” Newsom said. “We spend 3.4 billion just last week.”
While the western states appear intent to pressure the federal government to provide more stimulus funds, GOP lawmakers in Washington do not appear to ready to move on further stimulus with any type of urgency.
McConnell, the Senate majority leader, recently floated the idea of allowing states to declare bankruptcy, although he has since walked back the idea as it remains unclear if such a thing is even possible.
President Donald Trump also said he was reluctant to reward states he viewed as fiscally irresponsible or states that have been uncooperative with the federal government over issues like immigration.
“I think there's a big difference with a state that lost money because of Covid and a state that's been run very badly for 25 years,” the president said during a meeting with Florida Gov. Ron DeSantis, a Republican and one of Trump’s most vocal supporters.
California has often earned the ire of conservatives who say the state allocates too much of its money to overly generous pensions for public employees and that federal tax dollars should not be used to rescue states that committed fiscal errors.
But California officials say the issue has nothing to do with pensions but is instead about how to best navigate an era during which they’ve been forced to shutter entire economies in the face of a rapidly spreading and particularly virulent disease.
Also on Monday, state officials offered an explanation to lawmakers regarding how and why the state of California wired a half-billion dollars to an LLC that had been established only three days prior.
“In the midst of this global crisis, there have been those who see it as an opportunity for exploitation,” said Assemblywoman Cottie Petrie-Norris, D-Laguna Beach.
State Treasurer Fiona Ma said California wired $457 million to a company called Blue Flame Medical LLC, but that during the wire transfer the banks flagged the company for potential fraud by noting it was only three days old.