The District could get roughly $2.2 billion in federal aid as part of the proposed $1.9 trillion COVID-19 stimulus bill working its way through Congress, an amount that includes hundreds of millions of dollars the city was shortchanged under the CARES Act that passed last year.
The proposed breakdown for the $350 billion in direct aid to states, localities, tribes, and territories was released Tuesday by the House Committee on Oversight and Reform, ahead of a markup scheduled for Friday.
As part of the package, every state would get $500 million plus an extra allotment based on their number of unemployed workers; cities and counties would also get direct aid. D.C. would receive $1.49 billion in combined state and local aid, while Maryland would get $5.85 billion and Virginia $6.47 billion.
But D.C. would also take in an additional $755 million to make up for aid it did not receive under the CARES Act, the $2 trillion COVID stimulus package approved by Congress last March. While that package gave every state $1.25 billion in direct federal aid, D.C. got less than half that amount because it was designated as a territory instead of a state. That prompted months-long calls from D.C. officials for the city to receive more funding, but no direct aid for states and localities was included in the second COVID stimulus bill passed in December.
“We’re number one per capita in federal taxes paid to support the United States of America, so we were especially outraged when we lost money,” said said D.C. Del. Eleanor Holmes Norton, who has been pushing on Capitol Hill since last year for D.C. to get the money it was shorted in the CARES Act. “What’s important is that D.C. is treated as a state, city and county and therefore gets funding at all three levels. So we are getting the same funding as the states.”
In a letter sent this week to Speaker of the House Nancy Pelosi and Minority Leader Kevin McCarthy, D.C. Mayor Muriel Bowser said that the money — both the state and local aid and the back pay from the CARES Act — would help the city cover the costs of the pandemic, which is almost a year old.
“The pandemic has presented unforeseen challenges from health, human, and economic standpoints that we haven’t seen for generations,” she wrote. “Local solutions to shore up the the District’s finances, without drastic cuts to critical staff and services, are nearing exhaustion. As the trajectory of the coronavirus pandemic remains unclear, the District cannot sustain its current response without significant federal support.”
D.C. officials say they spent the full $495 million they received through the CARES Act on responding to the pandemic, along with more than $700 million out of the city’s reserves. And while the city was forecasting a significant downturn if the pandemic-related shutdowns continued, more recent estimates from D.C. Chief Financial Officer Jeffrey DeWitt have shown that the pandemic’s overall impact has been less severe than initially expected — sales taxes and hospitality jobs have taken a hit, while income and property tax collections have done better than expected.
“People in the stock market are doing very well. People working at a restaurant are not,” said DeWitt during a D.C. Council hearing last week.
Still, DeWitt warned that D.C. faces a $500 million budget deficit over the next four years, and has recently fully drawn down its unemployment reserves that are used in part to pay benefits to people who are out of work. While the city can borrow money from the U.S. Treasury to continue paying its share of benefits, DeWitt said lawmakers will have to find a way to replenish those reserves.
“Providing direct, flexible aid to localities in the most efficient and immediate way to help families and communities who have been suffering for far too long,” wrote Bowser.
Martin Austermuhle