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As Negotiations Continue, What GOPC is looking for in a Federal Stimulus Package

Maria Walliser-Wejebe

As businesses across the country continue to sound alarms about economic recovery prospects, cities and states report budget shortfalls, and COVID-19 infection rates increase in many states, it seems more and more likely that the federal government will need to intervene with another stimulus package.

Negotiations have been underway for months, but the prospect of enacting a new relief package before Election Day appear to be slim. Action after the election, however, is possible.

Below is a non-exhaustive list of investments and policies that GOPC would support in a new federal stimulus package.

Fund States and Local Governments

The CARES Act provided $2.5 billion for the state of Ohio, and $2 billion dollars for local governments, all of which has to be spent by December 30, 2020. The majority of local governments received their federal funding through two separate legislative allocations, the most recent of which was passed in September. The health and economic consequences of the pandemic will last well into the next year. In addition to allocating more money to support cities and states, the federal government could:

  • Allow local governments to use current CARES Act dollars to fill budgetary deficits

  • Extend the spending deadline to allow local governments to roll over unused CARES Act money into calendar year 2021

Support Public Transit

Through the CARES Act, Congress provided $25 billion in emergency support for public transit agencies nationwide. Continued ridership losses over the summer warrant additional aid for the nation’s public transit agencies. Immediate actions include:

  • Provide operating support for public transit agencies; if any capital funding is provided through existing formula funds, it should be in addition to direct operating assistance

  • Target resources to agencies that need it most, including those who do not receive federal and state formula funds

Longer-term recommendations for Congressional stimulus funding can be found in recent publications by Smart Growth America (SGA) and Transportation for America (T4A). Some of these are:

  • Increase formula public transit maintenance funds to a level that would cut the maintenance backlog in half

  • Institute reforms that improve the Capital Improvement Grant (CIG) program by limiting bureaucratic delays

  • Increase the federal share for transit projects to 80%, which would put funding levels even to the federal share for roadway projects

In addition to providing financial support to assist public entities in their response to the pandemic, the federal government should also be looking a other ways to invest in long-term recovery efforts.

Invest in Infrastructure

Infrastructure funding was a key component of the 2009 American Recovery and Reinvestment Act (ARRA), where Congress tried to stimulate the economy through $26.6 billion in flexible transportation funds. Future investments in infrastructure should keep in mind the following

  • Prioritize maintenance over new capacity projects. SGA reviewed 2009 ARRA spending by state in their report, Lessons from the 2009 Stimulus, and found that a fix-it-first approach to flexible infrastructure spending would work to bring the nation’s networks of road, bridges, and transit into a state of good repair while creating the highest number of jobs possible.

  • Expand broadband in underserved communities. The current pandemic has revealed that many small, rural, or disadvantaged communities do not have the availability or quality of internet service to access telework, telemedicine, and other critical functions that have shifted online as part of a public health response. Congress can increase funding to the USDA ReConnect Program, or tap into existing FCC program infrastructure, like the Lifeline and E-Rate programs, to expand broadband into underserved communities.

  • Create a national community retrofit program to encourage private investment. Another SGA recommendation for recovery, there is a tremendous backlog of infrastructure maintenance beyond transit, roads, and bridges. Public financing for infrastructure associated with redevelopment can involve the private sector, especially when it comes to brownfield revitalization. Congress can increase funding to USEPA’s brownfield redevelopment grants or leverage federal tax incentives for brownfield reinvestment by renewing section 198 o the Internal Revenue Service.

  • Invest in technical assistance to level the recovery playing field. Many municipalities lack the funding or staff required to create elaborate plans or navigate application processes for federal assistance. The USDA, EPA, EDA, and HUD should create an interagency team to aid rural and underperforming regions in their recovery from the health and economic effects of the pandemic.

Sustain Housing and Community Development

The federal government administers several robust funding programs, like the Community Development Block Grant, Low Income Housing Tax Credits, and HOME Investment Partnership programs. Congress has an opportunity to help communities prosper while improving options for low- and moderate-income families by increasing funding to existing programs. In addition to increasing funding to existing programs, Congress can act by: