Pritzker seeks federal funding to cover state, local government revenue losses

(The Center Square) – Gov. J.B. Pritzker criticized the Trump administration’s handling of COVID-19 Wednesday and said it can do better moving forward, including passing a measure to provide billions of dollars to cover lost revenue for states and local governments.

U.S. Rep. Lauren Underwood, D-Naperville, supported Congressional Democrats’ $3 trillion bill.

“The HEROES Act that will provide … $500 billion in relief funds to state government including almost $18 billion for the state of Illinois,” Underwood said during a virtual hearing of a U.S. House committee.

That bill remains in the Republican-controlled U.S. Senate.

During the hearing, Pritzker criticized the Trump administration’s handling of the country’s response to the COVID-19 pandemic, including the administration not implementing the Defense Production Act quicker to create low priced personal protective equipment. Pritzker said there are some things the federal government can do moving forward.

Among other proposals moving forward, Pritzker urged Congress to give state and local governments funds to cover lost tax revenues from the past three months.

“If you can spend trillions of dollars helping large corporations survive, $500 [billion] to support state and local governments, which provide such vital resources for our residents, I would say is a small price to pay,” Pritzker told the U.S. House Committee on Homeland Security on Wednesday.

Early in the pandemic, after states across the country had governors issue various orders prohibiting sectors of the economy considered non-essential from being open to the public to slow the spread of COVID-19, a bipartisan Congress passed and President Donald Trump enacted the Paycheck Protection Program. More than half a trillion dollars has gone out to businesses. More than $22 billion went to Illinois businesses with more than 27,400 businesses getting more than $150,000.

Taxpayers United of America’s Jim Tobin called the Paycheck Protection Program a boondoggle and said Illinois doesn’t need a bailout.

“Allow Illinois to go bankrupt,” Tobin said. “Then the bankruptcy courts can cut the wasteful spending because the politicians in Springfield have nothing planned but more income and property tax hikes.”

Another issue Tobin said is being neglected is pensions. He said a constitutional amendment is needed to reduce pension costs. The pension system for retired state employees takes about a quarter of every dollar the state takes in taxes.

“Congress should allow Illinois to go bankrupt,” Tobin said. “In the meantime, Mr. Pritzker and his friends in Springfield can pass legislation allowing local governments to go bankrupt. They can do that next week.”

Pritzker did discuss during Wednesday’s hearing how Illinois state lawmakers had to pass enabling legislation to divvy out billions of federal aid as part of a different COVID-19 relief package, but that approved funding was only for COVID-19-related expenses, not to fill revenue shortfalls from reduced tax revenues.

Illinois’ credit is on a negative outlook just above junk status. The state’s $42 billion spending plan relies on $5 billion in federal aid.

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