48 Kentucky Groups Call on Congress for Robust Federal Fiscal Relief to States

By admin
May 20, 2020

Educating children, protecting families, supporting healthy communities and other investments in Kentucky are essential to reducing harm during the COVID-19 crisis and creating a pathway to eventual recovery. As we can safely increase economic activity, the stronger the building blocks of our communities are, the healthier our economy will be.

That is why we, the 48 undersigned organizations from across the commonwealth, are deeply concerned by the fiscal situation Kentucky faces. Layoffs and reduced consumer activity related to the pandemic have led to a truly shocking state revenue forecast. The Office of the State Budget Director estimates that Kentucky’s General Fund will experience a shortfall in the fiscal year ending June 30, 2020 of up to $495 million. Next year, the shortfall could easily exceed $1 billion. This will take place even as the state must increase spending through important programs like Medicaid to address the impact of the pandemic.

Without adequate federal fiscal aid, the depth of cuts required to balance our state budget will be devastating to communities that have not yet begun to reinvest after a decade of budget cuts caused by the Great Recession. Further funding reductions for our schools, health care, human services, infrastructure, public safety and more will hinder our response to COVID-19. Adding teachers, first responders, social workers and other public servants to the long unemployment lines will only drag our economy further down.

Service reductions, layoffs and other impacts will fall hardest on communities already facing structural barriers to health and well-being. Lacking the wealth, income and proximity needed to access high-quality private services, Kentuckians of color, people living in the coalfields and other rural areas, Kentuckians with disabilities, the youngest and oldest of us and many others will bear the brunt of the crisis. By harming Kentuckians, deeper inequality will further limit our economic potential together.  

Yet none of this is inevitable. That is why we are calling on Congress to pass a robust federal fiscal relief package for states that prevents cuts to critical public services and cushions the blow from COVID-19.

Federal relief is the appropriate economic policy response to such a severe economic calamity. While states face balanced budget requirements, only the federal government has the ability to close an economic gap this wide. By doing so, Congress can help limit the harm and boost the economy once things open back up. In turn, a quicker, fuller recovery will help restore revenue growth at the state and federal level.

During the Great Recession, the American Recovery and Reinvestment Act provided $3.3 billion to fill holes in Kentucky’s budget. Those dollars were essential to keeping that recession from worsening into a depression. But in an important lesson for this moment, that funding ended too early — contributing to a decade of painful budget cuts. States cannot afford for such inadequacies to lead to another round of historically deep and protracted troubles.

Early indicators suggest the COVID-19 downturn maybe worse than the Great Recession. As of May 9, more than 740,000 Kentucky unemployment insurance claims have been filed. The federal government has provided some aid to states, but that assistance is set to expire and it is not nearly enough given the depth of the crisis as shown in new economic forecasts.

Experts now estimate that states need Congress to provide at least $650 billion in relief. This aid – which must continue until the economy has fully recovered – can be delivered through tools like a further increase the federal match for Medicaid and flexible grants to states.

Kentucky communities are in this together, and so are states. We all need Congress to protect our economy in this crisis and provide a path to a full recovery.

Advocacy Action Network

Appalachian Citizens’ Law Center

Appalshop

Access for Rural Community Health Coalition

Bridgehaven Mental Health Services

Clover Fork Clinic

Coalition for the Homeless

Community Farm Alliance

Fairness Campaign

Family & Children’s Place

Family Circle, Inc.

Feeding Kentucky

Forward Kentucky 

Four Rivers Indivisible

Giles Professional Counseling & Consulting

Governmental Management Advisory Services

Homeless and Housing Coalition of Kentucky

JCAESP AFSCME Local 4011

Jefferson County Teachers Association

Kentucky Center for Economic Policy 

Kentuckians For The Commonwealth

Kentucky Coalition Against Domestic Violence

Kentucky Coalition for Healthy Communities

Kentucky Conservation Committee

Kentucky Council of Churches

Kentucky Education Association

Kentucky Equal Justice Center

Kentucky Government Retirees

Kentucky Nonprofit Network

Kentucky Poor People’s Campaign

Kentucky Psychological Association

Kentucky Rural Health Association

Kentucky State AFL-CIO

Kentucky Voices for Health

Mountain Association for Community Economic Development

Matthew25 AIDS Services

Mental Health America of Kentucky

NAMI Kentucky

NAMI Lexington

NAMI Louisville

National Association of Social Workers – Kentucky Chapter

Northern Kentucky Justice and Peace

People Advocating Recovery

Planned Parenthood Advocates of Indiana and Kentucky

Pride Community Services Organization

UFCW 227

Wellspring, Inc.

Westview Tax Services

This sign-on letter was published in the Kentucky New Era on May 25, 2020 and in the State Journal on May 26, 2020.