May 20, 2020 – The Democratic-controlled House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act last week. Based on preliminary estimates, the bill would cost upwards of $3 trillion, or roughly 30% more than the CARES Act that passed on March 27.
The HEROES Act would allocate roughly $500 billion in aid to states and $375 billion to localities, or nearly 6x more than the $150 billion in federal aid to states and local governments under the enacted CARES Act.
Each state and D.C. will receive $2 billion each (for a total of $102 billion in fixed allocations based on jurisdiction), while territories and tribal lands will each split a $20 billion allocation – for a total appropriation of $142 billion for states, territories and tribal governments.
In addition, $150 billion will be divided by population; $49 billion will be allocated by share of COVID-19 cases based on CDC statistics and $199 billion will be based on unemployment as of the first quarter of 2021.
Based on an analysis by the Reason Foundation, New York State – the epicenter of COVID-19 cases – may receive a disproportionately lower share of federal aid relative to pandemic impacts and associated revenue losses.
The Los Angeles-based think-tank estimated New York would receive $35 billion in aid or $1,797 per capita versus California which could receive $50 billion in aid or $1,281 per capita. These estimates will vary with actual allocations, assuming the HEROES Act or similar Congressional provisions are enacted, as actual allocations will be dependent on metrics used and timing of the measurement of such metrics.
While on a per capita basis, it would seem that California is receiving less assistance, the Golden State has thus far avoided a wide-spread health crisis, with only 3,425 COVID-related deaths (87/1M population) vs 28,648 deaths (1,473/1M pop) in New York.
More tellingly, Governor Newsom has telecasted a state budget deficit of $54 billion, which would be substantially “made-whole” if the state receives the anticipated $50 billion in HEROES Act allocation.
Contrast this with Governor Cuomo’s daily-rehashed request for Federal aid to the tune of $61 billion to meet the state’s revenue losses and COVID-related expenditures. Even at the higher range of what HEROES would provide states, it would seem the Empire State was face tens of billions of unfunded needs and mandates.
There was a lot of angst and hand-wringing in Albany after the CARES Act was enacted and budget officials realized New York was receiving an embarrassingly low sum relative to its COVID-19 exposure. New York trades chronicled awkward exchanges between staffers of Governor Cuomo and the state’s two senators – Senator Schumer and Gillibrand.
The takeaways and promises made during those exchanges are anyone’s guess. But one thing seems clear – even as Democrats push for another unprecedented legislation to save the economy and working class – New York remains the national underachiever that garners a lot of attention, but not quite as much cash.
Contact Caren Moses at CMoses@buymuni.com.
