The NCSL Blog

20

By Emily Maher

At a time when the coronavirus outbreak has changed everyday life, states are at the front line, shields out, ready to combat the pandemic. Many states are responding swiftly, but will it be enough? 

Over the past week, 12 states enacted legislation addressing the outbreak through supplemental appropriations or rainy day fund transfers.

Many of these measures were signed just before a suspension or postponement of legislative sessions (24 legislatures have gone into recess). Several other states have COVID-19 response bills pending or on the governors’ desks.

Supplemental appropriations are generally made to adjust funding in a current fiscal year or for other needs that cannot wait until the next state budget appropriations act, such as an emergency. In response to the coronavirus emergency, seven states have passed supplemental appropriations.

Alabama appropriated $5 million to the Department of Public Health to establish remote testing sites and obtain testing materials. With a late fiscal year, the state has time to revise budget estimates and spending levels before the new fiscal year starts Oct. 1.   

Alaska appropriated over $4 million to the Department of Health and Social Services for fiscal years 2020 and 2021 if the cost of responding to the outbreak exceed federal receipts.   

In addition to approving $100 million to school districts and child care centers to cover school cleaning supplies and adopted school waivers, California lawmakers passed a bill appropriating up to $1 billion in supplemental funds bill to respond to the pandemic.  

Iowa Governor Kim Reynolds (R) signed SF 2408 on March 17. The bill creates emergency measures and supplemental appropriations across state agencies to combat the spread of the virus. 

Before the Maine legislature adjourned earlier this week, lawmakers passed a supplemental budget of $73 million, including a portion devoted to coronavirus response. A second bill authorizes transfers from the Reserve for General Fund Operating Capital to a COVID-19 response fund. 

In Massachusetts$15 million of general fund dollars were appropriated to a reserve fund for monitoring, treatment, containment, and public awareness and prevention efforts to the Department of Public Health, local boards of health and other public instrumentalities. The state also appropriated $95,000 to the state executive education office for treatment and prevention efforts.  

Minnesota has enacted two bills, appropriating $220.889 million to cover the costs of treatment for coronavirus patients and to bolster the states' Emergency Contingency Account.  

New York passed SB 7919, permitting $40 million in disaster emergency funds to Governor Andrew Cuomo (D) to issue any directive necessary to respond to the coronavirus.  

Remembering lessons from the Great Recession, some states took advantage of strong revenues during the past decade and built up their piggy banks, or rainy day funds, for unexpected shortfalls. Fund balances vary across the states, but at least four states tapped into these reserves for coronavirus response.  

Arizona appropriated $55 million from the budget stabilization fund to a public health emergency fund.   

In Georgia, Governor Brian Kemp (R) signed HB 792, amending the fiscal year 2020 budget to transfer $100 million in emergency funding from the state Revenue Shortfall Reserve to address the spread of COVID-19.    

Legislators in Maryland wrapped up the state's legislative session passing a $50 million from the state's rainy day fund, known as the Budget Revenue Stabilization Account, to fund costs associated with the coronavirus.  The legislature also passed a fiscal year 2021 budget bill, that includes a $10 million supplemental appropriation to the Department of Health for the current fiscal year to address coronavirus preparedness expenses. At the time of this blog, Governor Larry Hogan (R) has not signed the bill.

In Washington, the first state largely affected by the virus, lawmakers approved a $200 million appropriations package from the state's rainy day fund to disperse amongst state and local agencies and support unemployment benefits.

For more information on enacted budget legislation in response to COVID-19, check out NCSL’s state fiscal response page.    

The economic impact of the coronavirus is still largely uncertain. Volatile financial markets and fears of less consumer spending from "social distancing" damages have tested the accuracy of current revenues estimates.

New York, a state which relies on capital gains taxes from wealthy earners, is vulnerable to stock market volatility. New York State Comptroller Thomas DiNapoli estimates a $7 billion budget gap for fiscal year 2021, beginning on April 1. Colorado's Office of State Planning and Budget revised revenue estimates by $400 million for fiscal year 2020. Delaware lowered its monthly revenue estimates by more than $1 million. And in Hawaii projections were lowered by $22 million.   

At the federal level, President Donald Trump and Congress are rapidly passing bipartisan legislation to respond to the consequences of the coronavirus pandemic on public health and the economy. Over the past two weeks the following measure were passed: 

  • March 6—An $8.3 billion emergency coronavirus aid package is signed, focusing largely on public health. At least $1.05 billion of the previous aid package will go to state, local and tribal efforts through grants and cooperative agreements with the Centers for Disease Control and Prevention or as reimbursements from the federal government.  
  • March 13—Trump declared a national emergency in response to the coronavirus epidemic. The declaration allows the administration to utilize the Stafford Act, a federal law governing disaster-relief efforts. The declaration is expected to make $50 billion in emergency funding available to states and territories.  
  • March 18—The Families First Coronavirus Aid Package was signed into law. The bill includes free virus testing for those uninsured, emergency paid sick leave, expanded family and medical leave programs, unemployment assistance, food aid and federal funding for Medicaid.  

The Trump administration and Congress are currently working on a third coronavirus relief package. The proposed $1 trillion relief package would infuse $500 billion in direct payments to taxpayers and $500 billion in loans for businesses.  

Join NCSL on Friday, March 27 at 2:30 p.m. ET for the “COVID-19: Fiscal and Economic Issues” webinar. The webinar will lay out options for states, as well as provide an update on federal responses that may help states and their citizens navigate the crisis. Register for the webinar.

Emily Maher is a policy associate in NCSL’s Denver office.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.