By Ed Somers
February 3, 2003

New York Senator Charles Schumer came to the Winter Meeting on January 22 to unveil a new bipartisan bill (S. 201) which would provide $20 billion to states and $20 billion to local governments in one-time fiscal relief. The bill is cosponsored by Maine Senator Olympia Snowe.

In commenting on the bill, Senator Schumer said, "The fiscal crisis of the states and localities is a national issue. Without bipartisan commitment, this crisis threatens to undo any positive steps that we might take at the federal level to fix the economy."

Sen. Schumer said that the economic medicine needed for the economy must meet three criteria: 1) move quickly; 2) not impact the long term debt; and 3) be fair.

"Easing the squeeze on state and local budgets will help relax the pressure governors, legislatures, mayors and councils are feeling to raise taxes and cut services... and will quickly get federal money into the economy and into the hands of people who need it. To me that passes the test of being a great stimulus program," Sen. Schumer added.

In her written statement, Senator Snowe said, "The Schumer'snowe solution will stimulate local and state economies, and offer the funding needed to meet local priorities like homeland security, public health, child care, highway construction, Medicaid, or children's health insurance. In doing so, our bill primes the pumps for a more powerful recovery."

At the Winter Meeting, Senator Schumer emphasized that half of the funding, $20 billion, will go directly to local governments. Half of the funding will be allocated based on population, and half based on relative changes in unemployment levels.

The Conference of Mayors Economic Stimulus Proposal unveiled at the Winter Meeting specifically calls for General Economic Assistance for Local Governments, as well as calling for Medicaid relief for the states.

Senator Schumer urged the mayors to contact their Congressional delegations to urge co- sponsorship of this bi-partisan bill, and said he expects a companion to be introduced soon in the House.