PHOENIX – Sen. Martha McSally won’t commit to backing additional financial support for state and local governments during the COVID-19 pandemic, saying taxpayers should not bail them out for years of mismanagement.
During a recent virtual town hall hosted by the mayor of Surprise, McSally, R-Ariz., reiterated her call for increased flexibility in how funds can be used, but made clear she sees big, blue-state cities as trying to fleece red states.
“I’m just going to be frank with you guys, OK,” she said in an hourlong videotaped event. “This is not the time for states and cities — unlike Arizona, unlike Surprise — who have mismanaged their budgets over the course of many decades, for them to use this as an opportunity to see you, as a taxpayer in Arizona, as a cash cow for them in whatever city you want to talk about, whether it’s Chicago or New York or whatever."
McSally said some officials want to use the pandemic as their opportunity "to bail out states and cities that have nothing to do with coronavirus" but are financially struggling because failed budgeting and debt.
"This is not the time for us in Arizona and you in Surprise to be paying for mismanagement in Chicago," McSally said. "That’s what, actually, the left is advocating for right now. What we’re advocating for is we provide specific relief.”
McSally previously had declined to respond to recent suggestions from Senate Majority Leader Mitch McConnell, R-Ky., that states be permitted to declare bankruptcy rather than receive more aid from Washington.
Her remarks, first reported by the AZ Mirror, were not intended to be made public, said a spokeswoman for her office.
In a written statement Thursday afternoon to The Arizona Republic, McSally said she was working hard to make sure cities, towns and cities have the money and support they need during the pandemic.
She said Gov. Doug Ducey’s team told her office they were working to get previously passed relief money to communities next week.
“At the federal level, I'm fighting for maximum flexibility of resources so essential services like first-responders are also supported,” McSally added. "This is a top priority of mine, and I'll continue to be in close communication with our mayors and local elected officials as we work to get them support during this crisis.”
States, including Arizona, and cities are reeling from the pandemic, with plunging revenues amid the public lockdown while services, from public safety to sanitation, continue.
Unlike the federal government, nearly all state governments cannot by law run deficits, a budget reality that can trigger mass layoffs in a downturn. During the Great Recession, that meant widespread cutbacks for teachers, police and other public employees.
McSally’s views suggest she is again in alignment with McConnell, whose allies were a key source of financial support during her 2018 Senate campaign and are expected to be again this year.
The $2 trillion CARES Act that passed earlier this year allocated about $150 billion to municipalities. But only cities with populations of more than 500,000 received the money directly. Those with smaller populations — including many in Arizona — must wait for state officials to funnel the money through its coffers.
Patrick Ptak, a spokesman for Ducey, did not return a call from The Republic inquiring about the timeline of releasing $2 billion of CARES Act dollars.
Before the video surfaced, McSally had asked the Treasury Department to update guidance on what it considers eligible expenses on the money already allocated to local governments through the CARES Act.
The guidance has “unjustly narrowed” local governments’ ability to fully access the funding, she wrote in a letter to Treasury Secretary Steven Mnuchin.
She referenced the letter in the virtual event.
“If there’s a way to provide more freedom for the funding that’s already been allocated, that’s point 1,” she said. “I’ve been engaging on that with treasury and with GOP leadership. I had a call yesterday that McConnell was on that I made really clear that we need more flexibility that was already out there.”
McConnell came under fire for his bankruptcy suggestion and has since said he was open to considering new funding for local governments — among other things — as congressional leaders and the White House enter discussions on the next major phase of government assistance.
Sen. Kyrsten Sinema, D-Ariz., said in an April 23 statement that “partisan politics” shouldn’t jeopardize the financial health of local governments.
“Declaring bankruptcy would mean cuts to firefighters, police, health services, and job and business opportunities,” she wrote.
Sinema was echoing the sentiments of four mayors from Fountain Hills, Tolleson, Tempe and Superior. They asked McSally in an April 29 letter to “ensure the next bill passed by the Senate includes critical funding for state and local governments like ours.”
Mark Kelly, McSally’s Democratic opponent in the 2020 race for the Senate seat, has talked with more than a dozen mayors to keep a tab on their needs during the pandemic, his campaign said.
“Congress cannot let Arizona cities and towns go bankrupt in their fight against COVID-19 — that would only hurt Arizonans and our economy,” Kelly said in a statement. “This next relief package must include direct relief for Arizona’s local governments to avoid deep cuts to essential services.”