Fact Checker: Is the next COVID-19 relief proposal a ‘blue state bailout’?

Iowa's 3rd District U.S. Rep. Cindy Axne, the state's lone Democrat in Congress, has come under scrutiny for her support of the White House's $1.9 trillion COVID-19 relief proposal, the American Rescue Plan.

A digital ad paid for by the American Action Network, a conservative issue advocacy group, recently urged constituents in targeted Democrat-held congressional districts, including Axne's, to tell their representatives to oppose the package before it came to a vote in the House Feb. 27.

The Fact Checker looked into three claims the ad makes about the latest federal stimulus proposal, which the Senate began debating Friday in earnest.

Analysis

Claim 1: It is a 'blue state bailout.”

A review of an analysis from the Tax Foundation, a Washington, D.C.-based think tank that studies tax policy at the state and federal level, shows that 23 states with Republican control of the governor's seat and the state legislature would receive almost $121.4 billion under the proposal, while 15 state and Washington, D.C., that are under Democratic control would receive about $130.1 billion. Eleven states with split control, where one political party controls the governor's seat and another controls least one chamber of the legislature, would receive about $6.4 billion.

(The Fact Checker excluded Nebraska, which has a nonpartisan unicameral legislature, and used National Conference of State Legislatures data on state party composition.)

Even adjusted for population, the analysis shows 'blue” states would get more aid and would receive an average $1,278 per capita, while on average 'red” states would get $1,017 and split states would get $1,041.

Republicans argue that taxpayer dollars should not be given to blue states to 'bail them out” for policies such as business shutdowns they say led to high unemployment and steep revenue declines, or for histories of budget mismanagement that left them less capable of handling the pandemic.

Ten blue states and Washington reported a revenue loss in 2020 amid efforts to curb the spread of COVID-19, and so did 13 red states and four split states.

This bill, if passed, would send aid to all states, whether or not they lost revenue. But the formula for allocating funding takes into account each state's share of the nation's unemployed workers. The average unemployment rate is 5.03 percent for red states, 7.61 percent for blue states and Washington and 6.09 percent for split states, according to Bureau of Labor Statistics data.

Is this a 'bailout” for blue states?

On average, these governments lost less revenue but have higher unemployment rates, and do benefit the most on many accounts.

But many of these states encompass the nation's largest and most populous cities, like Los Angeles, New York and Chicago, where there is typically a much higher cost of living than in rural areas. Urban counties are also more racially and ethnically diverse, and the Centers for Disease Control and Prevention acknowledges minorities are more likely to contract COVID-19 and die from it.

The funds are not just for city and state coffers. They go toward keeping people employed and providing other services. Some red states and states under split control also need to plug revenue gaps and would receive funds from this bill.

Grade: C

Claim 2: The proposal 'doesn't reopen schools.”

The bill would provide nearly $128.6 billion to K-12 schools, available through Sept. 30, 2023, for COVID-19 relief.

It provides funds for 'school facility repairs and improvements to enable operation of schools to reduce risk of virus transmission and exposure to environmental health hazards” and for schools to address learning loss from virtual learning. This includes things such as improving ventilation systems, providing sanitation supplies and promoting other public health protocols like social distancing and mask-wearing in line with CDC guidance.

Republicans have looked to tie funding from the bill to requirements that schools return to full in-person learning in light of research showing improved learning outcomes and mental health when students learn in the classroom.

It is true that House Democrats in a party-line vote struck down an amendment that would prohibit K-12 schools whose teachers have been vaccinated from receiving funds if they do not return to in-person instruction. But the bill's text states funding is intended to 'enable operation” of schools.

Most students in the nation are back to school at least partially, available data show. Burbio, a company that tracks school opening plans nationwide, found that by March 1, 44.7 percent of K-12 students were attending school in-person every day. Another 27.8 percent were learning with some in-person and some virtual instruction.

This bill lacks the accountability the GOP amendment would have provided, but it would set schools on the path.

Grade: C

Claim 3: The bill provides 'tax $ to illegal immigrants.”

The text of the bill states that individuals who are eligible to receive $1,400 stimulus checks do not include 'any non-resident alien individual.” However, it also expands eligibility to dependents of other taxpayers, so checks could go to mixed-status households with a parent who is an undocumented immigrant. The White House when unveiling the proposal confirmed support for mixed-status families receiving stimulus money.

This proposal from the Biden's administration is similar to one passed under the Trump administration. While the CARES Act passed in March 2020 excluded families with mixed immigration status, the $900 billion stimulus package President Donald Trump signed shortly before he left office included a provision similar to the one in the American Rescue Plan about dependents.

Grade: B

Conclusion

The claims measured about the next COVID-19 stimulus plan concerning funding for state and local governments and school reopenings do not take into account key context, sinking the overall grade to a C.

Criteria

The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder about Iowa, or in ads that appear in our market.

Claims must be independently verifiable.

We give statements grades from A to F based on accuracy and context.

If you spot a claim you think needs checking, email us at factchecker@thegazette.com.

This Fact Checker was researched and written by Marissa Payne of The Gazette.