Baruah: Pending CARES Act Legislation Must Include Aid to State and Local Governments

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Today, during the State of Michigan’s COVID-19 briefing, Gov. Whitmer invited Chamber president and CEO Sandy K. Baruah to join her to stress the need for state and local government aid out of the next federal stimulus package.

Gov. Whitmer urged the federal government to work together across party lines to get this done.

“Michigan is not the only state calling on the U.S. Senate for this support,” Whitmer said. “Every one of us to be part of making sure this country navigates the pandemic and comes out stronger.”

As the representative for Michigan’s business community, Baruah explained how federal support is critical to address the needs of people and businesses as the COVID-19 crisis continues.

“The COVID health crisis has created an economic crisis we know all too well now.  But this crisis is not just limited to our households and businesses.  Governments are bearing the brunt of direct COVID costs as well as reduced tax revenues” said Baruah. “Our state and local governments are strapped for resources just when our citizens need help the most.”

Baruah noted that the U.S. Chamber and Federal Reserve Bank share the Chamber’s position. Federal Reserve Bank Board Chairman Jerome Powell has repeatedly called for Congress to meet the moment.

“To quote Chairman Powell, ‘the record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy.’ Further, he said, ‘additional fiscal support could be costly – but worth it – if it helps avoid long-term damage and leaves us with a stronger economy.’ Chairman Powell has been consistent – the seriousness of the crisis needs to be met with an equally serious response,” Baruah said.

Michigan Business Groups: Unify Behind Financial Relief Legislation

Last week, the Chamber led every major business organization – 15 in total – from all corners of the state to sign onto a joint letter urging Michigan’s Congressional Delegation to unify behind legislation to bring financial relief to states.

“The CARES Act provided $150 billion to assist state and local governments with direct COVID-related expenses, and this financial support has been instrumental in helping to minimize state budget cuts for the current fiscal year. Looking forward, however, the combined $5 to $6 billion net loss in state revenue over fiscal years 2020 and 2021, entirely caused by the pandemic, will force the most extreme reductions in public services at the moment our citizens need assistance the most. Michigan has been a leader in fiscal responsibility for the last decade, balancing budgets and paying down debt. We unite in the request that Michigan’s Congressional Delegation works to secure additional appropriations to support state and local governments,” the letter stated.

Baruah closed urging Michiganders to keep our businesses open by wearing masks.

State Budget Outlook

State Budget Director Chris Kolb shared the grim outlook for the state budget that needs to be wrapped up Oct. 1 when the new budget year begins.

“When we’re facing a shortfall in billions, we need additional aid from Congress to solve it,” said Kolb. “The fact of the matter is, department budgets are already skinny. There is no way to cut the budget in 2021 without cutting from essential services.”

Additional participants in the briefing included Dr. Joneigh Khaldun and Paola Mendivil, co-owner of El Granjero Mexican Grill in Grand Rapids. Watch the full briefing.

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