* This summary of the US Senate’s stimulus proposal was prepared by Illinois’ DC office…
• Extended UI program increases the maximum unemployment benefit by $600 per week and ensures that laid-off workers, on average, will receive their full pay for four months instead of 3 months.
• $100 billion in a Marshall Plan for the Health Care System.
• $150 billion for state and local Coronavirus Relief fund.
• $10 billion for SBA emergency grants of up to $10,000 to provide immediate relief for small business operating costs.
• $17 billion for SBA to cover 6 months of payments for small businesses with existing SBA loans.
• $30 billion in emergency education funding and $25 billion in emergency transit funding.
• $30 billion for the Disaster Relief Fund to provide financial assistance to state, local, tribal, and territorial governments, as well as private nonprofits providing critical and essential services.
• More than $10 billion for the Indian Health Services, and other tribal programs.
• Prohibits businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs.
• Makes rent, mortgage and utility costs eligible for SBA loan forgiveness.
• Bans stock buybacks for the term of the government assistance plus 1 year on any company receiving a government loan from the bill.
• Establishes robust worker protections attached to all federal loans for businesses.
• Creates real-time public reporting of Treasury transactions under the Act, including terms of loans, investments or other assistance to corporations.
• Creates a Treasury Department Special Inspector General for Pandemic Recovery to provide oversight of Treasury loans and a Pandemic Response Accountability Committee to protect taxpayer dollars.
• Adds a retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis.
• Provides income tax exclusion for individuals who are receiving student loan repayment assistance from their employer.
• No bailout for big oil.
• Eliminated “secret bailout” provision that would have allowed bailouts to corporations to be concealed for 6 months.
• Prohibits airlines from stock buybacks and CEO bonuses.
The Financial Times reported that the state and local money is a loan, but I’m told it’s actually a grant. Senate Minority Leader Chuck Schumer’s letter to his members outlining the package is here. NPR also has a roundup here. The House has yet to sign off on the package.
* Illinois obviously needs the dough. From Hannah Meisel…
The Commission on Government Forecasting and Accountability on Tuesday released a three-year budget forecast for the state, which the office acknowledged was now largely moot due to the still-unraveling impacts of the Coronavirus on the state economy.
COGFA estimated that the impact of the virus, also known as Covid-19, on Illinois would be even more damaging than the Great Recession, and predicted Illinois would likely also drop into a recession — just as the outlook for the state’s economy was becoming stronger. Standard & Poor’s earlier this month already declared a global recession. […]
But on Tuesday, COGFA predicted Illinois would experience a “peak-trough decline” in revenues of 20 percent — a reduction of more than $8 billion, though COGFA estimated that drop-off would likely be experienced “over multiple fiscal years.” […]
“If governments’ revenue performance also deteriorates – a rising risk stemming from the economic fallout of the coronavirus – pension affordability ratios will worsen significantly for some because of the combination of cost hikes and revenue stagnation or decline,” according to Moody’s.
Moody’s also said that governments’ capacity to “smooth” pension costs — a tool often used during and after the Great Recession — is much more limited now than a decade ago, as “significantly deferring costs to make up for 2020 investment losses would carry potentially severe long-term pension funding consequences for some governments.”
* From that COGFA report…
The accumulation of a bill backlog is a threat to the State of Illinois due to the high cost of either having to borrow from the financial community at higher rates or through incurring late-payment interest penalties. The backlog of bills had grown to a high of approximately $16.7 billion during the fall of 2017. As of March 12, 2020, the Comptroller reported a General Funds backlog of $7.6 billion, which is down from $8.8 billion from a similar time last year
The backlog is now at $8.07 billion.
* Meanwhile, from the New York Times…
The crisis has brought state policymaking to a standstill regardless of partisan control. Any legislative proposal with a price tag appears endangered.
In Idaho, Republicans shelved plans for broad property tax relief, saying they lacked time with the virus looming. In Missouri, also held by Republicans, the clock could run out on efforts to pass a bill to create a statewide database for doctors and pharmacists to track opioid purchases, leaving at least one Missouri Republican wondering aloud about additional opioid overdose deaths that may not be prevented now.
In Connecticut, controlled by Democrats, a long, fierce battle to create a public health option for those who cannot afford private insurance appears likely to fail, after lawmakers adjourned until at least March 30.
In Minnesota, the only state in the nation where the legislature is split between the political parties, Democrats had an eye on paid family and medical leave; Republicans hoped to exempt social security income from state income tax. Now everyone is recalculating. […]
And in state after state, lawmakers say they suddenly have little money to address anything but the unfolding medical and economic crises. In some places, the annual budget-writing process, which depends on projected tax collections, has been sent into chaos.
* And here’s a letter signed by every member of the Senate Republican caucus…
We want to commend you and your staff for your hard work during these difficult and unprecedented times. Like you, we agree that containing the COVID-19 virus and helping those in need is a top priority.
As Illinois residents continue to follow the best health practices recommended to help contain this virus, we believe it is important to give relief to those dealing with the economic repercussions facing our state. The Federal government recently moved to delay the Federal tax filing deadline, which we believe should be emulated in Illinois. This delay will help residents maintain the recommended social-distancing practices while also providing some liquidity to those who need it most.
Therefore, we are asking you to extend the state’s income tax filing deadline and couple it with the new Federal deadline of July 15. This simple act would make a big difference in the lives of residents throughout Illinois.
I totally forgot to tell subscribers this morning that the governor’s budget office informed some legislators yesterday that they think they can extend the income tax filing deadline if they have to, but they were hoping for a block grant from the federal government to ease the pain. So, stay tuned.
* Illinois’ D.C. delegation unifies around call for federal government to pick up National Guard costs: In a letter spearheaded by Democratic Rep. Cheri Bustos of Moline, the delegation asked Defense Secretary Mark Esper to issue more authorizations of National Guard under what’s known as Title 32, which provides for upfront federal funding for the Guard’s work. Guard units activated in New York, California and Washington have received the Title 32 funding designation.