[Congressional Record Volume 166, Number 95 (Wednesday, May 20, 2020)]
[Senate]
[Pages S2521-S2523]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMART Act
Mr. MENENDEZ. Madam President, as our Nation grapples with the COVID-
19 pandemic, our State, county, and municipal governments have been on
the frontlines taking a leading role in responding to this crisis. As a
result, they have been squeezed on both sides of the ledger, spending
billions of dollars in unforeseen costs on emergency response while
watching as revenues dry up due to necessary stay-at-home orders and
the closure of non-essential businesses.
The emergency protective measures have been effective at flattening
the curve and have no doubt saved thousands of lives, but they also
came with a cost. All revenue sources are down. Sales tax revenue has
plummeted with businesses closed. Highway trust funds won't have the
resources to do basic road maintenance. Downtown parking meters are
going empty due to people observing social distancing. Building permits
and municipal court fees have fallen.
Unless we act soon, we will see mass layoffs, devastating tax
increases, and a breakdown in public safety and essential services.
Already, the Bureau of Labor Statistics reported that State and local
governments laid off 1 million public employees in April. This
challenge is true for every State, county, city, and town in the
country.
The State Municipal Assistance for Response and Transition, or SMART
Act, is the bold, bipartisan, and commonsense solution we need to give
our communities a fighting chance and stop the economy from free-
falling. It provides $500 billion in flexible Federal dollars that will
help our communities dramatically expand the testing capacity and
contact tracing we need to contain the virus--a necessary step in
restoring consumer confidence and to restart the economy. It will help
stave off massive layoffs, tax hikes, and deep, painful cuts to
essential services. It will keep our police officers, firefighters,
public health workers, teachers, and other essential employees on the
job during this critical time, because it is not just about defeating
COVID-19; we still need to keep our streets safe, our children
learning, the trash picked up, the roads maintained, and the buses and
trains running on time.
I hear some of my colleagues speak from this floor, calling not for
unity but for division. They callously ignore the pleas for help from
their fellow Americans, comforted by the selfish but mistaken belief
that their communities are immune to the fiscal Armageddon facing our
communities. Let me be clear. When your revenues drop 30 percent
overnight, it really doesn't matter how fiscally responsible or
conservative your State budget is; no one can prepare for that.
Moody's just reported that States like Ohio and Arizona are facing
the fiscal shock of losing 20 percent of their entire budget, and West
Virginia, 40 percent. This is not a red State or blue State issue; this
is a red, white, and blue issue. It is an American priority.
In December of 1862, during the height of the Civil War, President
Lincoln wrote the following message to Congress: ``In times like the
present, men should utter nothing for which they would not willingly be
responsible through time and eternity.''
I believe that history will look kindly upon those who stood for
unity and compromise over demagoguery, those who put the well-being of
the country over scoring partisan points, those who stuck out their
necks and took a political risk for no other reason than it was the
right thing to do.
I am proud of the bipartisan coalition we have built, and I want to
thank each of my colleagues for their work and their commitment to
rebuilding our communities--Senator Cassidy, who has led this effort
with me, Senator Hyde-Smith; Senator Manchin, Senator Collins, and my
partner in New Jersey, Senator Booker.
With that, I turn to my friend from Louisiana, the distinguished
Senator who exemplifies these qualities and has been an incredible
partner in crafting this legislation and building this coalition over
the past month.
Mr. CASSIDY. Madam President, I thank Senator Menendez and return the
compliment. We have worked through a lot of issues to find a bill that
meets a valid, public purpose that can pass on a bipartisan basis in
both Chambers. I thank Senator Menendez for working with me on that.
The title of this bill is the ``SMART Act,'' but in retrospect, I
wish we had renamed it ``the Thin Blue Line Act'' because this is about
helping cities and States preserve essential services such as police,
fire, and education for the reopening of our economy.
Let's just kind of review. The Federal Government asked that State
and local governments shut down their economy in order to control the
coronavirus, and just like those small businesses closed at the behest
of the government authority, so did State and local governments close,
if you will, at the behest of the Federal authority. But what that did
is it devastated the tax basis.
Moody's, which Senator Menendez already alluded to, the independent
agency that looks at the finances of cities and States, has said that
if your State is dependent upon income tax, upon sales tax, upon
tourism, and upon proceeds from energy, you have been hammered. Your
tax base has fallen dramatically, and with the dramatic fall of that
tax base comes a dramatic fall in the ability to support the thin blue
line--the educators, the firefighters, the you name it, the essential
services that are essential to the reopening of our economy when we
come out the backside of this epidemic.
Now, it has already happened. Moody's predicts that 3 million of
these essential workers will be laid off. I am told that 1 million
already have been. You can read about universities laying people off,
but let's go back to the thin blue line.
The city of Shreveport, LA, just put out a budget in which there is a
$20
[[Page S2522]]
million hit to their city budget overall, and $3.9 million was,
unfortunately, laid upon law enforcement and 54 positions eliminated.
Now, I am told that some Federal dollars came through and allowed the
restoration of some of those positions, which, if you will, is a proof
in concept that if there is help from the Federal taxpayer to the State
and local taxpayer--because they are one in the same--then, these
essential services can be preserved. And we know that if those police
positions are preserved, then, that downtown in Shreveport is more
likely to safely reopen for commerce.
Now, we talked about Moody's predicting loss of revenue. Louisiana is
predicted to lose 45 percent of its revenue, but there are other States
affected. New Jersey, Maine, Florida, Oklahoma, Michigan, Idaho,
Alaska, Arizona, and Illinois are all predicted to lose large sums of
tax revenue.
So let me speak specifically about the SMART Act, or, again, as I
call it, the ``Thin Blue Line'' bill. It is a reasonable, bipartisan,
``this is how we go forward'' bill in both Chambers. We picked $500
billion. Some would say: Well, that is too much. Actually, that was the
amount of money that Moody's predicts State and local governments will
lack over the next year and a half. So we actually kind of nail where
the independent agency puts the need for our State and our local
government, and it is targeted.
One, there has been a lot of concern that this would be used to
``bail out States,'' that those who have accumulated a large, unfunded
accrued liability in their pension funds would use that money to
support those pension funds. We specifically do not allow that. So if
that is somebody's political concern, that has been addressed.
What do we do? Well, first, a third of the dollars can go out now
because it is based upon population. This recognizes that if California
has 31 million people and Wyoming has 500,000, there needs to be some
accommodation for just the population size because, inevitably, that is
going to influence the total need.
The next third will go out at the end of June, based upon how hard a
State was hit in terms of health from the coronavirus. So if your State
was slammed from coronavirus--Louisiana was, New Jersey was, and other
States have been--then, that is where you get the help.
Frankly, it is unfortunate that you are getting the help. It would be
a lot better if your State had not been impacted, but if it has been
impacted, it is there to support your State through the health aspect
of this crisis.
The last third will go out at end of this calendar year. That is
based upon the financial hit that your State has taken. So if your
State's tax base has been decreased by 45 percent, then, you would get
additional dollars in the third tranche of money, which comes out at
the end of the calendar year. Obviously, at the end of this calendar
year is almost beyond the fiscal year for most States, and so that
would place the dollars at the State's disposal for the next fiscal
year. In that way, we cover this prolonged period that Moody's says
that State and local governments will be out.
There is one more concern, and that is whether or not all this money
will go to a Governor's office and none will go to counties or parishes
or municipalities in Louisiana. One-third of the dollars will go
directly to municipalities and counties--those local governments that
are on the forefront of providing services to those who are being
affected by the coronavirus epidemic.
We think we have something which balances the needs of stakeholders--
the most important stakeholder being the American citizen--that both
addresses the need for fiscal accountability and the need to preserve
those essential government services to get our economy going once more.
Again, I am going to ask all of my colleagues to support the ``Thin
Blue Line'' bill, otherwise known as the SMART Act. I think it is a
smart way to go forward to make sure we don't slip into a recession,
but we return with as robust an economy from this crisis as when we
entered the crisis.
With that, I will yield to my colleague from Maine.
The PRESIDING OFFICER. The Senator from Maine
Ms. COLLINS. Madam President, I am pleased to be a cosponsor of the
SMART Act, and I want to commend Senator Menendez and Senator Cassidy
for their tremendous leadership. Our bill would help offset the
collapse of State and local revenues resulting from the COVID-19
pandemic.
The coronavirus has already claimed the lives of more than 90,000
Americans. As the virus damages our health and deprives us of our loved
ones, it has also devastated our communities and our economy.
As of last week, nearly 20 percent of Maine's total civilian
workforce had filed for unemployment. The tourism sector has been
particularly hard hit, and this is so important to my State. But the
fact is that no industrial sector has been immune from this disease.
Restaurants and hotels in southern Maine face uncertainty, not
knowing when or even if they will ever reopen. As a result of having to
cancel nonessential surgeries, many hospitals are struggling to stay
open. Lobstermen and fishermen have lost major markets. Potato farmers
may be unable to sell more than $22 million worth of their 2019 crop.
The motor coach industry has been devastated. In short, working
families and communities across the State of Maine have been hit hard.
Moody's forecasts that Maine may face one of the worst impacts in the
entire country in terms of lost revenues. Eighty-five percent of
Maine's State revenues are from income and sales taxes. They have
plummeted. Gas tax revenues have tanked. These projected shortfalls
threaten vital State and local services.
One in six Mainers is employed in the public sector. These are the
individuals who keep our communities and our citizens safe: the police
officers, the firefighters, the EMS personnel. They provide healthcare
and education. They maintain our roads and our bridges.
When I visited the Orono Fire Department recently to deliver some
much needed masks, the town manager told me that the decline in excise
taxes has been devastating for this town.
Maine communities tell me that they will have no choice but to either
increase property taxes, at the worst possible time for working
families, or eliminate first responder jobs and slash education funding
if they do not receive help.
The SMART Act would help to avoid the worst of these consequences by
providing $500 billion in Federal relief to State, local, and Tribal
governments. Unlike the CARES Act, where only big cities were eligible
for assistance, under our bill every county and every community would
be eligible for funding. Maine would receive at least $2 billion,
including about $330 million for counties and $330 million for
communities. And the $1.25 billion that we already appropriated for
assistance to State governments under the CARES Act would be made much
more flexible so it could be used to offset these dramatic revenue
shortfalls.
The fallout from the coronavirus is unprecedented. Congress has a
tremendous responsibility to help mitigate the impact of this crisis on
our States and our local communities and on the families they serve. We
must not wait. We should act now.
Thank you.
The PRESIDING OFFICER. The Senator from New Jersey
Mr. BOOKER. Madam President, I thank Senators Cassidy and Menendez
for leading on this extraordinary bill and the broad bipartisan support
that it has.
I know Senator Menendez and I have both been mayors in our
communities, and when there is no crisis, we know intimately the
challenges that so many of our public servants face. In times when we
do not see pandemics, our firefighters put their lives on the line, our
police officers put their lives on the line, and our teachers
extraordinarily work above and beyond the call of duty. Indeed, our
communities are strong because of these dedicated public workers.
At a time of crisis, we see that our teachers are rising to the
challenge, working to keep their students engaged, even though they are
now miles apart. I hear stories of teachers riding around, going out to
visit students, keeping their distance but ensuring that the students
get the support they need.
[[Page S2523]]
Our firefighters are out there now, putting their lives even more at
a risk, putting themselves on the line to help their communities.
Police officers are answering calls without hesitation, despite the
great risk that puts on them and their families when they go home.
So many of our other public servants are working diligently to keep
our communities running, to keep our States strong to meet a crisis,
and to try to help folks stay healthy and stay safe. Without
hesitation, across New Jersey--across all of our 50 States--we are
seeing more clearly the heroic actions of people who are leading in a
time of crisis.
But as was said by my colleagues, across the country, States are
being hit by significantly declining revenues and extraordinarily
increasing costs. We are already seeing early projections, as discussed
by my colleagues. Even independent rating agencies like Moody's are
talking about hundreds of billions of dollars in deficits for our State
and local governments.
My own Governor has estimated New Jersey's protracted gap caused by
those declining revenues--those extremely rising costs--to be somewhere
between $20 and $30 billion.
Due to these shortfalls, without immediate action from Congress,
State and local governments will be forced to make deep cuts to public
services, including laying off folks who are not just essential in word
but who often make the difference between life and death, safety or
crisis in our communities. These would be the workers who would be laid
off at a time when we need them the most.
Not only do we need these vital public servants on the job,
protecting our communities, educating our kids, and supporting our
neighbors, but cuts like these actually will aggravate and deepen the
overall economic crisis facing our country. Independent rating agencies
and others say that cuts like these will actually prolong our economic
crisis and the time needed for recovery. This is not the time for half
measures. This is the time to act at the scale that the crisis demands.
The Federal Government needs to be providing a robust, accurately
tailored response to this crisis by funding our State and local
governments in a way that prioritizes those areas that have been hit
the hardest. The SMART Act does exactly that. It is a bipartisan bill.
It is thoughtful. It is tailored narrowly to fit this crisis.
The SMART Act is a commonsense approach that will make sure that the
help is going to where it is needed most--to our hardest hit
communities and States--and to help ensure that those workers whom we
hail with our words--firefighters, police officers, and teachers--we
support with our actions, as well, for they are out there right now
supporting us.
No State should go bankrupt fighting this virus, because of this
virus. No State should go bankrupt because we in the Federal Government
refuse to support them. No essential public worker should lose their
job because of this crisis and because Congress was not stepping up to
lead through it.
There is no time to waste. As was said by my colleague, we have folks
in my State who are putting together their budgets right now. As we
heard from my colleague from Louisiana, they are already accounting for
the need to make cuts. We have already seen hundreds of thousands of
public workers being laid off. The delay has costs, and when you are
talking about first responders, the delays can have costs that are hard
to imagine.
I encourage my colleagues to see this as what it is. It is an
accurately tailored response. It is a bipartisan bill. It is what our
Nation needs right now. I encourage my colleagues in the Senate to work
to get this to the floor so that we can vote on it, pass it, and get it
through Congress to the President's desk, so we can avoid the storm
that we are in and, ultimately, overcome the severity of its ravages
The PRESIDING OFFICER. The Senator from Georgia.
Mrs. LOEFFLER. Madam President, I ask unanimous consent to complete
my remarks before the 12:30 p.m. vote.
The PRESIDING OFFICER. Without objection, it is so ordered.