The most dire revenue forecasts during the early months of the pandemic didn't materialize, helping fuel criticism that the relief for states and cities isn't needed. States had braced for a more severe economic downturn.
The misprojections explain why Biden's COVID-19 relief bill earmarks less than one-third the $915 billon previously set aside for states and cities in the Democrat-backed HEROES Act last year. The bill passed the House, but was never taken up in the then-Republican-controlled Senate.
Arkansas Gov. Asa Hutchinson, a Republican, said the $350 billion would be "good news for the states" but questioned whether it's really necessary. He expressed concern about raising the national debt.
"I think this is where there needs to be some negotiation down from the $1.9 trillion," Hutchinson said, noting that Arkansas has a surplus of $240 million from the previous year. "Our unemployment has dropped. People are going back to work. Our economy is sound and our state budget is sound."
If Congress approves the direct aid, Hutchinson said he hopes to have flexibility to use his state's portion on high-speed rural broadband along with restoring the state's Unemployment Insurance Trust fund.
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