Stitt: More state bailouts may create perverse incentives
September 17, 2020
Gov. Kevin Stitt remains opposed to additional federal bailouts of state governments, saying states have not yet spent all the bailout money already provided by Congress and warning additional bailouts could incentivize economically destructive policies in other states.
“I think the feds have already poured over $4 or $5 trillion into this pandemic, and as long as states are continuing to shut down and there’s a pot of money that they feel like is flowing into their state, there’s no real need to get the economy back going again,” Stitt said.
While Oklahoma has fully reopened its economy since the spring COVID-19 shutdown, other states continue to impose sometimes-severe restrictions on business activity, and national unemployment figures remain far above pre-COVID levels as a result.
Stitt noted Oklahoma still has roughly half the federal bailout funding approved by Congress earlier this year, and said he sees no need for more.
“We still have not got our $1.2 billion out the door yet,” Stitt said. “We’ve got about $600 million out the door to our different state agencies, to the cities, the counties, the businesses that have been affected by this.”
The governor said he has been direct when asked by the Trump administration for his thoughts on additional federal bailout funding.
“Let’s get this money out the door first before we go back and borrow another $2 trillion from our children and grandchildren,” Stitt said. “Let’s see how these first three stimulus packages work before we go back to the well again.”
Nearly two dozen Oklahoma state lawmakers have signed a national letter of opposition to additional rounds of federal bailout funding, saying the money would effectively force taxpayers in fiscally prudent states to subsidize other states that have adopted policies critics view as counterproductive and economically harmful.
“While the economy has produced record revenues in recent years, sadly, states have also continued to accumulate massive amounts of debt and unfunded financial liabilities,” the letter states. “A federal bailout would only encourage this cycle of debt and spending to continue. It would also send the wrong message to states that have made difficult spending choices and practiced fiscal discipline.”
In August, U.S. Sen. James Lankford also spoke out against a bailout proposal being pushed by Democrats that included nearly $1 trillion in bailout funding to states.
“Just to be able to put that in perspective, the total budget for every state in America is $900 billion,” Lankford said. “Every state’s total budget combined spending that they do in a year, $900 billion. My Democratic colleagues want us to give almost $1 trillion to the states for COVID expenses. Their total budgets for every state in the entire country for the entire year is just over $900 billion, and they're willing to give $1 trillion to them on top of it. That is more than replacing every state budget in America. That is absurd.”