Stimulus Solves Most — But Not All — State and Local Budget Problems

Source: governing-com Published: March 11th, 2021

Pittsburgh ran through $120 million in reserve funds last year and yet still faces a shortfall. The city has been planning to lay off 633 workers at the start of its fiscal year in July, or more than one out of six of its employees.

But suddenly, those workers no longer have to worry about their jobs. Pittsburgh stands to receive more than $300 million in direct federal aid, as part of the $1.9 trillion stimulus package President Biden signed yesterday.

“These funds will help us avoid layoffs and will also allow us to fill the revenue gaps the pandemic created last year and this year,” says Kevin Pawlos, Pittsburgh’s budget director. “It will also allow us to restore vacant positions and programs that were removed from our 2021 budget.”

Similar stories are now being told all over the country. Almost overnight, budget shortfalls accumulated over the past year are being eliminated, thanks to the federal largesse. The stimulus includes $350 billion in direct aid to states and localities — $195 billion for states and $130 billion for local governments, with the rest going to territories and tribal governments. 

Click here to read more