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W E E K L Y  U P D A T E  May 26th, 2020
 
In this Week's Issue:
House Set to Take Vote on Expansion of Paycheck Protection Program
Coronavirus Crisis Causing Devastating Revenue Shortfalls in States, Cities
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House Set to Take Vote on Expansion of Paycheck Protection Program

The U.S. House of Representatives is set to vote on Wednesday on legislation to expand the Paycheck Protection Program (PPP), which is aimed at keeping small business afloat during the nationwide shutdown caused by the coronavirus pandemic. The Paycheck Protection Flexibility Act (H.R. 6886), introduced by Reps. Dean Phillips (D-MN) and Chip Roy (R-TX), would permit businesses receiving PPP loans to be able to use the funds for more than the eight weeks and would relax a requirement that 75 percent of the loan money be used for payroll expenses. Congress has approved nearly $660 billion for PPP loans through multiple bills aimed at addressing the pandemic.

In the U.S. Senate, Sens. Michael Bennet (D-CO) and Todd Young (R-IN) have introduced the Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART)Act, which would give businesses which took out PPP loans the flexibility to utilize the loans effectively, while also creating a loan program to provide funding to jump-start the hardest-hit businesses for the remainder of 2020 and provide loan forgiveness as a backstop against ongoing economic challenges. As of yet, no vote on the RESTART Act has been scheduled in the Senate.
Coronavirus Crisis Causing Devastating Revenue Shortfalls in States, Cities
There is now substantial documentation of the devastating impact of the coronavirus crisis on state and city revenues as well as increasing media attention to these major state and city revenue shortfalls nationwide.  The Northeast-Midwest Institute released a concept paper on April 13 highlighting the urgent need for federal action to replace non-recoverable state and local revenue shortfalls resulting from COVID-19 mitigation initiatives, which is available here.
Governors, mayors, and local officials are sounding increasingly dire alarms that they are confronting major revenue gaps due to business closures and unemployment, and that these revenue shortfalls are projected to grow in the months ahead.  State Budget Watch has released a report with data documenting state revenue shortfalls state-by-state as a result of the ongoing coronavirus crisis here.
An updated selection of news articles reporting these state and local revenue gaps and the need for major federal support follows:
Mass Layoffs begin in cities and states amid coronavirus fallout



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