Passage of federal pandemic aid to states and local communities has resulted in a windfall of more than $15 billion for Texas.
Republicans in Congress have derided the relief money as an unnecessary bailout for cities that mismanaged their budgets during the pandemic. But Texas cities and other local governments stand to benefit in a big way from the infusion of federal dollars – an amount that far outstrips the economic impact of the pandemic itself.
Todd Gillman is Washington bureau chief for The Dallas Morning News. He told Texas Standard that it took 60 days for the amount of money coming to Texas to become clear because of the way federal relief is distributed. Now that the numbers are in, local governments are figuring out how the money can and cannot be used – and there’s a lot to work with, since estimates suggest Texas lost around $4 billion due to the pandemic. The $15.8 billion coming from the federal government is closer to the current balance of the state’s rainy day fund.
But Gillman says restrictions on how the money can be used prevent Texas from adding it to the rainy day fund, or for things like pensions, despite many cities struggling to meet pension obligations during the pandemic.
“It can be used to hire first responders, or to give them bonuses, or raises, or so-called combat pay for pandemic workers,” Gillman said.
The money can also be used for infrastructure or direct pandemic-response efforts.
All Republicans in Congress, including Texas Sens. Ted Cruz and John Cornyn, opposed the Biden administration’s $1.9 trillion aid package that includes the $15.8 billion.
“But local officials are obviously embracing it, as it makes their jobs a whole lot easier as they’ve seen local sales tax revenues fall,” Gillman said.