On Wednesday, April 23, JLF’s Mitch Kokai went on to the “Lars Larson Show” to discuss the recent letter the John Locke Foundation, along with more than two dozen additional think tanks, sent to Congress arguing for loosened regulations on federal aid to the states included in the CARES Act.
The problem that my organization, the John Locke Foundation – along with state-level think tanks in about half the states now – have found and pointed out to the leadership in Congress is that one piece of that $2 trillion CARES Act … called the “Coronavirus Relief Fund” is designed to help states cope with some of the needs that are created by this COVID-19 pandemic. The problem is … the way this law is written … one of the rules for the Coronavirus Relief Fund is that the money is supposed to be used for items that were not accounted for in the budget that was already approved by the states… What this means is it is calling for state governments to spend money on NEW programs… basically what this is saying is “state government, find new ways to spend money.”
Rather than finding new ways to spend money, these think tanks argue the money would be better spent filling in the holes in the state budget caused by lost tax revenue due to the pandemic. Kokai states:
One of the things that the organizations [are recommending] is, one, to replace the lost tax and fee revenue…
The second option would be one-time tax relief. If every state as part of this Coronavirus Relief fund is getting at least $1.25 billion (and in North Carolina it is more than $4 billion), some of that can go to cover the essential services [that] are going to have to continue, like prisons, [education, etc.], but one of the options is one-time tax relief to people who aren’t working and need money to help them start to get back to their lives once we get closer to what the new normal is going to be.