State Revenue Is 'Virtually Flat.' Local Government Revenue Is Up Slightly. Congress Wants To Give Them $350 Billion Anyway.

The Democrats' COVID bill showers billions of unneeded dollars on state and local governments.


Congress is inching closer to passing a $1.9 trillion COVID bill. If it becomes law, it will shower billions of dollars on local and state governments whose revenues have been minimally affected by the pandemic.

Over the weekend, the Senate voted along party lines to approve the Democrat-backed bill, whose provisions include $350 billion in support for state, local, and tribal governments.

States will get $195 billion of that money, with each state receiving $500 million at a minimum, plus additional funds based on their numbers of unemployed workers. Local governments will get another $130 billion. Territories and tribal governments will recieve another $25 billion.

This aid comes on top of the additional transit and education funding the legislation sends to states and localities. When that's included, roughly $510 billion—a quarter of the package—will go toward state and local aid. Past pandemic relief bills have already provided state and local governments with some $310 billion, according to the Committee for a Responsible Federal Budget.

That incredible sum—which is in spitting distance of the Defense Department's budget—is gaining approval even though overall state revenues fell by only about .1 percent in 2020, according to a recent analysis by the Reason Foundation (which publishes this website). An analysis from J.P. Morgan similarly found that tax revenues were "virtually flat" for the 47 states that report their incomes on a monthly basis.

This isn't the case everywhere. Falling oil prices led to steep revenue declines in Alaska and Texas. The lack of tourism hit the Florida and Hawaii state budgets pretty hard. The fiscal year 2021, which ends in June, is also supposed to be leaner, with revenues expected to decline by about 4.4. percent.

The overall picture is nevertheless much rosier than earlier in the pandemic, when analysts were predicting state revenue declines of some $500 billion.

Indeed, an analysis from the National Taxpayers Union's Andrew Lautz has found that when accounting for states' rainy day funds and steady revenues, only about $6 to $16 billion (not the proposed $195 billion) would be needed to make those governments whole.

Lautz also argues it's inappropriate to divvy up money to states based only on their number of unemployed residents, given that the jobless are already receiving targeted benefits and that those benefits are themselves helping to prop up states' tax revenues.

"Individuals who want a job and don't have one are certainly struggling right now, but the [$900 billion] December bill and the proposed COVID-19 relief package support them with a $300 or $400 per week boost to their regular unemployment benefits," writes Lautz. "The $600-per-week benefit from the CARES Act helped prevent major state revenue dropoffs in part because it allowed unemployed people to continue spending at rates similar to before they lost their jobs."

Local tax revenues, while harder to measure given that most local governments don't report their revenues as frequently, appear to have risen year-over-year by about $60 billion during the first three quarters of 2020, according to a separate Reason Foundation analysis.

That aggregate number obscures a lot of variation between local governments. New York City saw its revenues go up during 2020, while other places like Philadelphia and Houston saw their incomes fall.

Nevertheless, a steady climb in property values during 2020, and thus the property taxes most local governments rely on, firmly in the black.

"For now, it appears that the most pessimistic revenue scenarios outlined at the beginning of the COVID-19 crisis are failing to materialize for most local governments," writes Mark Joffe, a senior policy analyst at the Reason Foundation. That suggests that the $130 billion in aid to local governments included in this most recent bill is also wildly overgenerous.

The need of recipients, however, seems to be a distant concern for the White House and Congressional Democrats backing the $1.9 trillion relief proposal. The bill is chock-full of spending that has little to do with combating the pandemic, and everything to do with rewarding liberal constituencies.

More concerning still is the seemingly muted reaction from most Americans, including many Republicans, at the price tag.

As The Washington Post's Jeff Stein noted Sunday, a much smaller $800 billion stimulus bill provoked a furious reaction from Republican voters and politicians, and criticism from more moderate Democrats. There doesn't appear to be any similar fiscally conservative backlash to the $1.9 trillion packages moving through Congress.

Having passed the Senate this weekend, the spending legislation goes to the Democrat-controlled House for approval. Proponents hope it'll pass quickly in that chamber and land on Biden's desk by the end of the week.

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  1. “The bill is chalk full of spending that has little to do with combating the pandemic, and everything to do with rewarding liberal constituencies.”

    And, as every good progressive knows, the true and proper goal of government is to reward loyalists …. and punish insurrectionists.

    1. Also, “chalk full?” Come on, man.

      This is what happens when everyone at Reason gets promoted to “editor.”

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  2. I suspect at least part of the problem is that most people have no conceptual framework to appreciate the difference between a billion and a trillion. They might get anxious at $847 million because that’s a lot of money, but a measly $1.9 trillion? Look, it’s less that 2 of them! Surely it can’t be a lot!

    1. I agree, J. “Count to a thousand. Now, simply do that a billion times.”

    2. The lockdowns brought about prosperity.

    3. I also think a good deal of the willingness to accept these spending bills stems from the fact that many Americans truly believe that our monetary system is really just a convenient fiction, amenable to manipulation, subject to revision, and that the dollar has no inherent value. In other words, people really do believe that money grows on trees (or, in our case, are populated on government spreadsheets).

      If it’s all fake monopoly money anyway, what’s the harm? Fuck it — print some more.

      1. There are plenty of videos, including on CNN, of people demanding their 2k.

        1. And, curiously, if you ask them why they are only demanding $2,000.00, they will not have an answer. The same situation plays out in the minimum wage context. Why $15.00 an hour? Why not $100.00? Or, a $1,000.00? They clearly believe money is fake and grows on trees, but still feel compelled to constrain their fantasies.

      2. Good parody of Tony, and, I quote: “Where does money come from? The government makes it,”

        1. It’s a major defining function of government.

          1. To Tony and almost all left leaning people —–
            The Power (Gov-Guns against people) to Steal/Print labor = Wealth.
            The party of slavery; still loyal to their foundational slogan.

            1. If you’re making your wealth with labor, you’re doing capitalism wrong.

      3. > it’s all fake monopoly money anyway, what’s the harm? Fuck it — print some more.

        That’s where I am. Fuck it. Just don’t get caught holding the bag.

        1. “what’s the harm?” — All those people who actually WORKED for it.

        2. Sadly that’s also where our “leaders” are at, and they’re grabbing everything they can before the house of cards comes tumbling down.

      4. 70% of the people do not have to work have new cars shop in stores and drive on the roads every day

      5. That is the same logic that those who would steal from their employers often use.

        “‘Hey, they’re a big company and they aren’t going to miss a few reams of paper……………. Besides. They owe me!’

    4. Which reminds me, I was talking to somebody who insists she’s not in favor of “Free Shit For Everybody” (she is) but insists there are some things that the government should be morally obligated to provide so she’s in favor of a UBI, universal healthcare, free college tuition, government-guaranteed jobs and housing, free child-care, a high minimum wage and so on. I mentioned to her that a UBI would cost more than we can afford, given that “a living wage” (which, as $15 an hour becomes more probable, more people are allowing as how an even higher minimum wage is what we really need) would seem to be the minimum acceptable amount for a UBI, let alone healthcare and all the rest. She wanted to know how I figured it was “unaffordable” and I mentioned that the GDP of the US was only somewhere around $20 trillion and the government already spent somewhere around $8 trillion. She was somewhat surprised at that, not that the government spent so much of the GDP but that it spent so little. As far as she was concerned, if the government only spent 8 of the 20 trillion, it could easily afford to double its spending. How the hell do you even talk to people who think all the money belongs to the government and whatever it allows you to keep is a gift from them to you?

      1. “How the hell do you even talk to people who think all the money belongs to the government and whatever it allows you to keep is a gift from them to you?”

        With a gun in hand, that’s how.

      2. Government is god

      3. For progressives, many young people and many minorities trained in the fine arts of entitlement, they really do believe this crap. No need to take care of oneself. Society will do it because they owe each of us that.

        The reality one can never convince them of is, free = somebody else pays.


    5. That is definitely part of it. The idea that you can just conjure money and there are no consequences.

      How much do regular people even know about this bill and the possible consequences? The media is a part of the government. How many hard hitting analyses have been done? Has the WaPo suggested interest rates might go through the roof? Has the NYT suggested massive cuts will have to be made when the gov’s borrowing costs skyrocket in 2023? Or that the states/locals aren’t out money and will use it to shore up pension and almost certainly increase those pensions with the found money?

      Which outlet has suggested permanent damage to the labor market from inducing people to not work and be deadbeats for 1.5 years? What happens when the free 18/hr payoff runs out?

      People get the government they deserve. But man, once social media became part of the democratic party along with traddy media, the regular jerkoff lost most of his chance to discovery anything.

    6. “a billion here, a billion there, and pretty soon you’re talking about real money.”

  3. We must spend billions of dollars until we have flattened the curve of the cronyvirus.

    1. Yuck, yuck = cronyvirus

      So true.

    2. I think you should worry about dealing with your bronyvirus first.

  4. Congratulations, Reason. You got exactly what you wanted.

    1. Wrong within normal parameters

    2. It has been fun watching the leftist retards like DoL and sarcasmic try to defend biden as coming from the center even with the last 40 days of EOs, spending, etc.

      1. Well, in their defense, Biden is not literally AOC, so his leftward lurch is still acceptable. And, frankly, so long as Biden is not literally Stalin, the socialism he is readily embracing is quite agreeable. You see, Trump could not benefit from these kinds of ameliorative comparative analyses because he was literally Hitler.

        1. Yes, I well remember Trump demanding more money for those gas chambers.

          1. But, but, but… in cages? Really!

      2. This coming from someone who’s favorite past time is ripping left wings off flies.

        1. This coming from someone who’s favorite past time is ripping left wings off flies.

          It helps them circle back when they need to…

  5. What is things we knew last year.

  6. Should I care? They didn’t seem to give a damn when they were giving billions to corporations, especially huge ones that certainly didn’t need the funds.

    It’s always “bootstraps” for the people and local govts (especially when cities and such produce the bulk of GDP) but it rains money for corporations like there’s no tomorrow.

    I’d much rather direct my ire at them giving corporations who were doing stock buybacks and then complaining about how much they were hurt rather than local governments getting some money back that they put into the system.

    1. Oh, puh-weez.

      You are fine with the handouts, no matter where they go and who receives them.

    2. Except local governments didn’t “put into the system” one thin dime, if by system you mean federal government. Some local governments spent excessively, rewarded government employee union members and alumni excessively, and imposed excessive lockdowns which limited local sales tax revenues. So why should individual taxpayers from other states that governed themselves more sensibly bail out the irresponsible?

      1. pensions have bankrupted US car companies and all businesses. the towns cities counties states have to float 30 year bonds to pay current retired parasites. the whole stinking pile of shit is transferred to the feds

    3. Yet your democrat overlords voted for those too. Yet you try to call us out when your democrat overlords, now unbound, make it a thousand times worse. As if it was worse before.

      You really are the worst kind of subhuman garbage.

      1. Traitor

    4. Fuck off Jeff

    5. “cities and such produce the bulk of GDP”

      What? On what planet?

      Besides, didn’t your mother ever tell you? Two wrongs don’t make a right.

  7. But seriously folks, where did all that revenue come from if the economy was shut down?
    Lottery tickets?

    1. Booze.
      Toilet paper.
      Household cleaners.
      Hand sanitizers.

    2. Higher earners have done just fine this past year, and they’re where most of the revenues come from.

  8. So Biden is pissing away $1.9 trillion.

    He still about $2.5 trillion short of Trump’s record for wasted handouts.

    Fuck them both.

    1. He’s been there for 2 months.

    2. no, Trump’s spending is the new baseline.
      it’s new records all the way down.

    3. “Wasted Handouts” of legislation written 87% by Democrats and voted 100% Democrats in favor of. Someone’s partisan bias is showing.

  9. A single mother of a toddler, who earns $10,000 a year providing in-home care to older people (with work hours that fluctuate significantly from month to month), now receives a Child Tax Credit of $1,125. Under the House plan, she’d receive $3,600, a gain of $2,475.
    A single mother with a 4-year-old daughter and 8-year-old son, who is out of work for the year due to a health condition, now receives no Child Tax Credit at all, adding to the family’s financial insecurity. Under the House plan, she would receive the full Child Tax Credit of $3,600 for her daughter and $3,000 for her son to help with the children’s expenses.

    1. You really only care for the young kids I bet pedo.

      1. You beat me to it. We all k is he wants to fuck those small children.

        1. Traitor

    2. Hmmmmmmmmmmmmmm………………….

      Paying people to have kids. And more kids.

      Sounds like????????????????????

      Welfare queens all over again.

  10. For a spending measure passed into law to address Covid, there is damned little in the law directly tied to addressing Covid.

  11. How can local government revenues be up? Much municipal revenue usually comes from wage tax and if even 10% are out of work the government should be getting less. Case in point: Philly has a wage tax on suburbanites who work in the city. I know of many instances where those suburbanites working at home now have stopped paying city wage tax and a lot of these people are higher income managers and professionals.

    1. Travel junkets.

    2. Most municipal revenue DOES NOT come from income taxes. It comes from sales and use taxes. Most cities don’t have an income tax.

      Oh, and from the state and federal governments through various “programs” designed to incentive cities to get with the prescribed program.

      I worked in local government for twenty years and spent a good deal of my time trying to finagle federal and state funds so that we could spread it all around as we pleased.

  12. Whatever makes the sociopaths unhappy is good policy.

    1. Whatever skeetch, you know as well as I that the only sociopaths are you and every left wing asshole on this planet.

  13. Wait, additional transit funding?
    No one’s riding transit, it’s not safe. Costs should be way down.

    1. Wrong!

      Precisely because nobody is riding transit, costs should be up. That’s Government Economics 101. The less something is used, the more expensive it must become in order to cover the shortfall in demand.

      Less people riding the subway? Fare increases!
      Less people using highways and bridges? BUMP UP THE TOLLS!
      Less people paying taxes because they lost their jobs? Higher taxes for those still fortunate enough to have a job.

      When going out of business is not an option, and people are forced to swallow your dick, you can shove whatever you want down their throats and demand that they thank you for the privilege ….

      1. Actually, you’re both wrong.

        “Public Transit” is part of left wing utopia. We can’t live without it they say. So, the feds are constantly trying to pump funds into it. Because it’s for the “poor, the elderly, the children”. You know?

        Yada, yada, yada.

        I often wonder about Bob Poole because, subsidized public transit is one of the more un-libertarian endeavors that our government promotes.

  14. Sevo won’t be commenting for an hour or so. He’s an alcoholic pussy and had to go to a 12 step meeting.

    1. Don’t worry. He’ll save a seat for sarcasmic.

      1. I think that WAS Sarc.

        1. Not Sarc ya fascist Traitor!

          Get out of MY COUNTRY you America hating traitor.

          1. Oh, it is the one that rode the Mormon train. Must have been a rough ride.

            1. Mark Hoffman blew his ass up hard ….

  15. If only there had been some way to avoid this before it happened!

    How often did we talk about the bailout of the states in comments in the months before the election–wasn’t it every day?

    This was one of the best reasons to reelect Trump, and everyone who acts surprised to see this happen should look at themselves in the mirror, give themselves an uppercut, and promise to never be so stupid again.

    P.S. Biden ripped up Trump’s peace deal with the Taliban over the weekend, too.

    1. “[L]ook at themselves in the mirror, give themselves an uppercut, and promise to never be so stupid again.”

      There is no time for all that. They are too busy jerking off in the mirror while thinking about all the bomb-ass cocktail parties they are going to get to attend. What is the life of a professional propagandist without all the gratifying, alcohol fueled bacchanalia? The circle jerks must be truly epic. If you are going to preside over the demise of a free society, relentless debauchery is a necessary cushion against the blows of a guilty conscience. If only Epstein was still around.

    2. You beat me to it. The Dems have been itching to do this for a decade. They were stymied by the Republican takeover of the House in 2010, but they only needed to bide their time. Took them less than two months to get it done.

      1. No need to go back a decade. The reason Trump refused to sign off on the stimulus in the days before the election was because of the bailout of the states.

        “Trump says he doesn’t want stimulus bill to bail out Democratic states”

        —-CNBC, October 23, 2020

        If Trump had won, there simply wouldn’t be a bail out of the states, and that was an excellent reason to vote for him.

        California, for instance, will never cut spending–until they have no choice. Bailing them out saves them from cutting spending on things like outrageous pensions for state employees. If Trump had been reelected, California and New York would be laying off tens of thousands of unnecessary state employees, and that, my libertarian friends, is what it looks like when the government gets smaller.

        1. Like a nightmarish hellscape only a sociopath could enjoy?

          1. Useless government employees being shown the door, the horror!

            1. You think pensions are outrageous? According to what measure? Too much money being guaranteed to people who sign a contract on the matter?

              At some point you need to realize all your economic ideas serve upward wealth transfer and no other social concern. Hence sociopathic. In fairness, most people who vote for such things are dupes who get no benefit.

              1. As they are unaffordable and unsustainable, they are simply wrong. And, compared to what anyone outside of government gets, they ARE outrageous. Plain and simple.

                Over 50% of the annual expenditures in large cities in California is funding pension liabilities. And yet, CalPERS is still seriously underfunded.

                So Tony, how the hell do you plan to pay for all of this largess? Please do tell.

                1. So sell a couple failed fighter jets.

              2. According to the measure of what comparable jobs in the private sector get for pensions. Full stop.

                1. Comparable jobs minus the pensions, you mean?

  16. But, but, but partizan Yellen says the bill will rocket launch the economic recovery so it must be trew!!!

  17. If only someone could have foreseen this….

  18. The local government is more trustworthy in the sense of revenue generation than state authorities.

  19. The bill is chalk full

    WTF? It’s full of chalk?

    I guess when you’re too busy towing the lion, some things get past the Sr. Editors, Editors, and Assoc. Editors. Reason should hire someone who can write.

    1. And that just doesn’t jive with me.

  20. So many good comments about a well-reasoned enquiry. The only nit I can pick is that “chalk full” should have been edited to “chock full” prior to posting.

    1. I’ve seen it spelled both ways myself. However, I was not an English major.

  21. Getting federal money to shore up their failing PEU pension funds was 100% the goal from day 1 of the pan(dem)ic and the reason they all overreacted so gleefully. The amazing part is that they didn’t fuck up the economy half as bad as they intended.

    You get more of what you subsidize. More government workers, more pandemics.

    1. Tail wagging dog!

  22. Once I realized the government,,especially the dems were going to take COVID and RUN with it, my first thought was “how much federal money will these financially underwater states grab to put towards their massive debts?”

    In the words of Stossel, “yippie!”

    1. The sad thing is they’ll be back in the same debt boat within the next ten years.

      1. More like five. Medicare – not coincidentally – goes broke then too.

        1. Viva la revolución!

  23. Democrats have an insatiable thirst for driving the country into a financial abyss so they can be seen as utterly vital for mere sustenance that they can wrest from the shrinking numbers of makers to reward their constituents, the takers. Successful, independent people are an anathema to the Democrats. How again is that different that how so many other totalitarian govts arose? Is it?

  24. ///Democrats/// Governments have an insatiable thirst

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