WASHINGTON — Using the recent influx of federal funds to expand state and local clean energy infrastructure, affordable housing and workforce development will pay long-term dividends, a group of Democratic governors and mayors said Wednesday at an event hosted by a prominent liberal think tank.
Ahead of the National Governors Association’s winter meeting here this week, Govs. Roy Cooper of North Carolina, Wes Moore of Maryland, Jared Polis of Colorado, Tim Walz of Minnesota, and Kathy Hochul of New York gathered at the Center for American Progress to promote the large federal spending packages passed in the last two years under the Biden administration.
The funding, championed by President Joe Biden to offset the pandemic’s economic downturn and rebuild U.S. infrastructure, has allowed the governors to expand services in ways they said will benefit their states for years to come.
The governors were joined by Democratic Mayors Muriel Bowser of Washington, D.C., and Levar Stoney of Richmond, Virginia, who added that the funds could help address economic equity and social justice at the local level.
Patrick Gaspard, the think tank’s CEO, praised Biden for getting bills through Congress in 2021 and 2022 to spend trillions of dollars on a range of programs, despite Democrats’ narrow majorities in both chambers.
During that time, Biden signed bipartisan bills to boost semiconductor manufacturing and spend $1.2 trillion on infrastructure, and Democrats-only measures to boost clean-energy spending and spend $1.9 trillion on COVID-19 relief.
Yet the money itself does not necessarily translate to results without active, responsible implementation from state and local leaders, the CEO said.
“Americans are restless, the planet is waiting for no one, and the world is moving so fast,” Gaspard said. “Getting this right is an opportunity to remind the American people of what we’re capable of doing when we all grow in the same direction.”
Funds to bolster community and the workforce
Moore kicked off the event, emphasizing that leaders should use the historic federal funding for projects that support the working class.
“We have a unique opportunity to actually make good for a lot of people who have struggled for a very long time, and they feel chronically left behind,” Moore said. “I see them every single day.”
Within his first three weeks in office, Moore said his administration teamed with the federal government to launch a $5 million broadband expansion program.
The state will also start work on a multibillion dollar replacement of the Baltimore and Potomac railroad tunnel this year, with financial support from the bipartisan infrastructure law, Moore said. The project will enhance high-speed rail service from Baltimore to Washington, D.C.
Moore said his administration will also make investments to advance universal pre-K education in Maryland, and ensure the state has a service-year option for every high school student in the state.
“We have to create pathways for students to be able to have measurable growth and success no matter which pathway they go,” Moore said.
Walz said that another way to spend these federal funds in a forward-thinking way is to empower the workforce through incentives like child tax credits and improving the state’s public health care option.
“Demographically, northern states are aging,” Walz said. “We have to address what our workforce looks like, to fill these jobs and to innovate, when we’ve always been on the front end of that.”
Walz highlighted recent efforts the state is taking to plan for its long-term economic health, including a pledge to use 100% clean, Minnesota-based energy by 2040, and significant investments in early-childhood education.
A push for clean energy
Walz also pointed to growing investments in the state from domestic solar companies, and a new partnership between Minnesota and the Finnish green technology industry.
“Minnesota wants to be the place where we manufacture, the place where we do innovation, the place where we implement that,” Walz said. “I think we can’t be aggressive enough on this.”
Polis said the funding packages allowed for spending on environmental priorities, including accelerating a transition from oil and gas to wind and solar energy in Colorado.
Polis said his administration is pushing the federal government to cut red tape surrounding a clean air tax credit package, which he said would ensure maximum benefits for businesses when the Inflation Reduction Act — the law Democrats passed last year that includes $400 billion for renewable energy spending, mostly in tax credits — takes effect.
The governor also said that the state legislature is drafting $2,000 and $5,000 electric vehicle tax credits. But the federal tax incentives that could stack on top of those benefits are not yet “very deployable,” he said. The Inflation Reduction Act tax credits require that components of those vehicles are sourced from U.S. materials, which could slow the national EV transition, Polis said.
“The last thing we want is people have to delay their decisions to buy an EV because they know larger tax credits are on the horizon,” Polis said. “I urge the Biden administration to implement this with the maximum flexibility they have.”
Polis added that as Colorado expands its renewable workforce, he encourages the federal government to lead a “just transition” for legacy fossil fuel workers into the new industry.
“The jobs are different, and the skills are different,” Polis said. “And we need to make sure that we bring people along and that we can support people’s livelihoods in the clean energy future.”
Equitably transforming American cities
While the governors highlighted state-level solutions for policymakers, Stoney and Bowser brought another issue to the forefront of planning investments: social inequity in U.S. cities.
Bowser said the biggest economic challenge that American cities face is revitalizing the economy equitably after the post-COVID 19 pandemic. She floated using various pots of federal money to revitalize the business travel sector, and downtown areas.
She also said federal funds could be used to close wealth gaps between African-American and white communities in D.C.
Stoney added that his administration has already spent $20 million from Democrats’ 2019 COVID-19 relief bill on housing development. Richmond will use $78 million from additional government funding plans on new community centers in redlined neighborhoods, and expand public early childhood education by 250 students, he said.
Stoney and Bowser said federal funding programs should be adjusted to ensure money goes directly to all cities, not just those of 500,000 people and above. They noted that conflicts between local government and state legislatures have made it difficult to access the funds that are supposed to flow to cities.
“It gives us the flexibility to innovate and be creative,” Stoney said. “Because at the end of the day, it’s the cities and mayors on the front lines.”
Holding government accountable
Cooper said the federal funding had improved high-speed internet and water quality across North Carolina.
Funding from the Democrats’ 2022 climate, health and taxes law and the 2021 bipartisan infrastructure law is helping the state navigate ongoing shortages in early-childhood education providers, and its low health insurance enrollment, he said.
Cooper added that North Carolina was close to expanding Medicaid coverage, thanks to incentives offered in the 2021 COVID-19 relief bill. The expansion would provide healthcare for 600,000 of the more than 1 million uninsured North Carolinians.
The state is one of 12 that have not expanded Medicaid under the terms of the 2010 federal health care law.
Cooper said voters would have to push political leaders to continue to spend the federal dollars wisely, and not reallocate it to things like tax cuts for the wealthy.
“We need to make sure that we understand that this money is for new infrastructure for innovation, looking at decades down the road,” Cooper said.