Facing $3 Billion Shortfall, Oregon and other Western States Ask for Trillion from Feds

In a letter to Congressional leadership this week, governors and legislative leaders from the five members of the so-called “Western states pact” requested $1 trillion in federal relief to states and local governments in the wake of the COVID-19 pandemic.

Leaders of the states — which include Oregon, California, Washington, Colorado and Nevada — say the federal relief is necessary to avoid deep cuts to services like public health, safety, education and employment.

“It is now clear that Covid-19 will be with us for the foreseeable future, and the worst of its economic impact is yet to come,” said the letter, which was signed by Oregon Governor Kate Brown, Senate President Peter Courtney and House Speaker Tina Kotek, among others. “Our states are on the front line against the virus while at the same time leading our states’ recovery.”

Leadership representing the five states, which have agreed to coordinate the reopening of their economies in a regional effort, said federal aid is critical to help avert further economic catastrophe. All 50 states have been impacted by what has become a national recession — resulting in a record amount of lost wages and business failures, spiraling unemployment and substantial, unplanned costs driven by the Covid-19 response.

“Even states that began the year in a strong fiscal position are facing staggering deficits amid growing costs of responding to the crisis,” the letter said. “With unemployment projected to surpass that of the Great Recession, we are facing unprecedented and ongoing economic challenges.”

Without federal support, they say, states and cities will be forced to make “impossible decisions” — like whether to fund critical public health care or prevent layoffs of teachers and other first responders.

“And, without additional assistance,” they continue, “the very programs that will help people get back to work — like job training and help for small business owners — will be forced up on the chopping block.”

Though even the trillion dollars the five states are asking for will not fully recoup the anticipated lost revenue from the Covid-related downturn, they say it will make a “meaningful difference” in their ability to recover.

“Red and blue states alike all are faced with the same Covid-19 math, as are Democratic and Republican mayors across our states,” the letter concludes. “The moment requires unprecedented partnership from all of us — across every level of government and across party.”

The news came on the heels of an earlier statement from Governor Brown’s office estimating the calamitous impact the coronavirus shutdowns have already had on Oregon’s economy. The state is estimating revenues for the current budget cycle to be down by $3 billion, which “will lead to some really difficult decisions,” the governor acknowledged.

She has directed state agencies to prepare contingencies for cutting up to 17 percent from their budgets for the upcoming fiscal year — which she termed a “planning exercise to explore all options.”

“We haven’t made any final decisions, and the agency plans serve as important information gathering at this point,” she said. “We know a potential cut of this magnitude would be extremely drastic.”

How drastic the cuts will ultimately need to be will depend on several factors — not the least of which is the amount of support Oregon ultimately receives from the federal government.

“While these are uncertain times, one thing is clear: State employees are working many long hours to keep Oregonians safe and secure during this pandemic,” she said. “In this time of crisis, Oregonians rely on state services more than ever, and cutting critical state services will be a last resort.”

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