Cassidy & Menendez propose SMART Fund to help state and local governments due to COVID-19

NEW ORLEANS, La. (WVUE) - Louisiana U.S. Sen. Bill Cassidy, a Republican, has teamed up with New Jersey Democratic Sen. Bob Menendez to propose billions of dollars in help for state and local governments affected by the novel coronavirus pandemic.

The proposed State and Municipal Aid Recovery and Transition (SMART) Fund would contain $500 billion to help states and local governments, according to Cassidy and Menendez, who discussed their plan with news media around the country on Monday (April 20).

"One-third is based on population size, that makes sense. One-third is based upon infection rates, that makes sense and respecting the diversity of economies around the country, one-third is based upon revenue losses,” said Cassidy.

"All states will receive at least $1.25 billion from this fund, a 45 percent carve-out in this tranche to cities and counties with populations above 50,000 which will receive about 45 percent of the share of their state’s population,” said Menendez.

And representatives of New Orleans government and state government reacted to the proposal.

"As we look to recovery for the city of New Orleans it's going to be absolutely vital to have some of those infusions into our local municipalities,” said New Orleans Chief Administrative Officer Gilbert Montano.

He said the city continues to feel the impact of lost revenue due to the pandemic.

"We are certainly, as we've talked about, facing a very significant revenue loss,” Montano said.

From New Orleans City Hall to the State Capitol 80 miles west, the coronavirus crisis is causing financial pain.

Rep. Jerome Zeringue, R-Houma, is chairman of the House Appropriations Committee, which is where the state budget must begin in the legislative process.

"The budget is in bad shape, in terms of how we're going to address these deficits,” Zeringue said.

Montano said New Orleans government is tracking its coronavirus-related expenditures.

"So, right now we're between about $3.2 and $3.8 million dollars and then I break it down further, outside of personnel costs for all those individuals who are working specifically related to COVID-19 response time which is a different number,” Montano said. "Then we projected a little bit further out, each month and each day we're going to be looking [at] something in the probably $25 million to $35 million dollar mark for our overall COVID response."

"We're anticipating having to address a $450 to $500 million shortfall for next fiscal year,” said Zeringue about the state. State government’s new fiscal year begins on July 1.

And state government is not only suffering financially because of a decrease in tourism but also low oil prices.

"That, in and of itself is going to have significant impact, not to mention the loss of tourism dollars, gaming,” said Zeringue.

Montano was asked if the city is contemplating cuts, furloughs, or layoffs.

"There is some contemplation, everything from furloughs to even early retirements, I mean there is some sequences that you have to look at before you make some of these significant discussions, but they're all being contemplated,” Montano answered.

But he noted that such measures could be positively impacted by the infusion of federal dollars.

Cassidy and Menendez said even though there is a pandemic, local governments are not relieved of their responsibility to provide critical public services and so they need help.

"We need municipalities to have the ability to fund the fire department, similarly, basic municipal services, cleaning up trash, public protection,” said Cassidy.

Montano agreed.

“We have core operations that are absolutely necessary,” said Montano.

Cassidy and Menendez said the SMART Fund would build upon the existing $150 billion set aside in the CARES Act which became law last month.

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