Rep. Susie Lee: “Letting State and Local Governments Go Bankrupt Is Really Bankrupting the Future for Our Children.”

June 15, 2020
Press Release

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Las Vegas, Nev. –  Member of the House Committee on Education and Labor, U.S. Rep. Susie Lee (Nev.-03), participated in a committee hearing examining the state of America’s education system during the COVID-19 pandemic. 

Rep. Lee has been one of the most vocal advocates in Congress pushing for federal assistance to states and communities suffering from devastating budget shortfalls due to lost tax revenue during the pandemic, which is expected to lead to cuts in Nevada’s already-underfunded education system.

Rep. Lee addressed the harm that COVID-19 related budget shortfalls will have on Nevada’s K-12 education system: 

“We are already seeing cuts take place in my home state of Nevada where we have a $812 million state budget hole caused by the coronavirus.  

“As a result of closures to local businesses and losses to crucial sales and tax sources that pay for most of Nevada’s budget, our state budget gap had an anticipated $265 million projected shortfall in K-12 education funding.  

“Many other states are planning cuts that will take effect in the 2020-2021 school year, with revenue shortfalls across states projected to continue into the 2021-2022 school year.  

“It’s clear that tough decisions will need to be made to navigate through these deficits, across the nation we can expect to see cuts.

Rep. Lee and the hearing witness, Mr. Michael Leachman, Vice President for State Fiscal Policy Center on Budget and Policy Priorities, agreed that the COVID-19 emergency funding passed by Congress so far is not nearly enough to meet the needs of states and school districts: 

Rep. Lee - “We can look back to the Great Recession during which Congress provided $160 billion under the Recovery Act. This included $60 billion for K-12 education.  

“The CARES Act allocated $13.2 billion primarily for K-12 education. Is this enough funding to meet the needs of states and school districts?” 

Mr. Leachman - “No, $13.2 billion is not remotely close to what will be needed. We’re projecting overall, state-only shortfalls of $615 billion over the next three fiscal years. This is an extraordinary crisis. Providing way less funding than what we provided during the last recession is not going to cut it.  

“We believe the additional amount that should be provided to states and local governments should be sufficient to meeting the shortfalls that states face.

“States have received some aid, and they have some rainy day funds. But even after you use those things, overall those shortfalls of $440 billion, the local government shortfalls, and the other needs we have in terms of addressing the COVID-19 crisis, we need to get much higher than $13 billion. 

Rep. Lee - I think it’s rather clear to us that letting state and local governments go bankrupt is really bankrupting the future for our children.”

BACKGROUND: Earlier this month, Nevada Governor Steve Sisolak announced that Nevada is expecting an $812 million budget shortfall in 2020, caused by lower tax revenue from the economic fallout of the COVID-19 pandemic.

Congresswoman Lee has continued to push Congress to support federal assistance for states and local communities to address budget shortfalls, especially for hard hit states like Nevada.

On April 17, Rep. Lee introduced legislation to increase critical federal aid for Medicaid programs as state unemployment rates worsen. The bill creates automatic triggers that increase the Federal Medical Assistance Percentage (FMAP), or the share of Medicaid costs borne by the federal government, based on each state’s unemployment condition. An increase in federal Medicaid assistance will help states allocate budget resources towards important programs like education, infrastructure, and social services. A provision similar to her legislation was included in the Heroes Act, which passed the House of Representatives on May 15.

The Heroes Act also includes expanded stabilization funds for smaller communities with populations of fewer than 500,000, which were excluded from CARES Act relief. Smaller cities in Nevada’s 3rd District, like Henderson and Boulder City, would directly benefit from this aid, along with billions of dollars in direct assistance to states that were included in the Heroes Act.

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