 All right, welcome family welcome welcome welcome Eric coffee here your host of the GovCon Giants podcast And also now we are featuring our all-new podcast making a giant So if you have not seen our all-new podcast making a giant with Maria Martinez take a look on our YouTube channel today This is part two of a two-part series on state local federal gun contracts which one should I pursue and And in part one we discussed The fact is you can do your research and attending or going to a small enterprise or small business advisory board meeting within your local municipality So that was part one. We went into that. We went into the reports here and we looked at some of the Ways in which you can do research and start learning about This particular one so if you miss part one go back and look at part one. This is part two where I'm Discussing the various stimulus package the CARES Act and then Now president Biden his new package that he's proposing and we're going to take a look at these packages and see how they are changing the landscape and also Now they're changing my stance on small business contracting at the local and state levels So this is part two if you miss part one go back and see it All right part two This particular report I found very helpful and the gist of the report is Excuse me The gist of the report And let me pull up so you can see the title is by Brookings edu how much is COVID-19 hurting state and local revenues and so someone went back and they pulled the economy and they did all these fancy studies and What and again without reading at all what I liked is that they project here That the state local government revenues were declined 155 billion in 2020 167 billion in 2021 and a hundred and forty Five billion 22 about five five, you know five percent respectively. All right Um, and then it talks about excluding the declining fees of hospitals and higher education those fees We had 180 100 990 6 7 million so That particular report essentially just grab the sum total of all of the losses and Now what we do is again, we want to do our fact-based research So we compare that uh to this particular. This is center of budget and policy priorities CBPB.org and we look and it shows you here the pandemic causing sharp revenues drops in states And you can see here the various states declined from Delaware 40 million up to say Connecticut 2.6 billion and in california Wapping 32 26 or 32 billion dollars. So it's a lot of money Being lost as a result of the pandemic However, however, right and so so let me let's just let's start with that premise. So given that The you know and again when we talk we speak from a point of reference My experience is uh when I was doing state contracting and local contracting Even when times were good just The nature of the the government personnel that were working in the offices If they failed to submit your paperwork or turned it in On time then you would get paid it would delay your payment And maybe it only delayed your payment two weeks. Maybe three weeks. Maybe four weeks But as a fellow small business person, I understand how critical two weeks three weeks four weeks is To in terms of getting paid, right? I understand the severity of that particular situation and scenario So that's why when people ask me for my recommendations I tell them the truth, which is hey, you know, they delayed my payment if you can stand You got the cash flow to be able to stand being delayed by a couple weeks Great, it creates an opportunity because a lot of folks are not going to be able to do that So that's the beauty is if you can do that and stand Would stand being delayed for a few weeks or month or two months then wonderful And that was in good times. That's was in the good times when the market was great When the market took a nosedive Right and the last time recession right before obama came in the office and the market took a nosedive Obama only passed one stimulus package And so the one stimulus package while it helped tremendously get the economy going again A lot of us contractors felt the brunt of that and and we had to deal with the impact today Today the government at this point has now They passed two stimulus packages, right? So they're one of the relief program that was passed back in march And then the one that was just passed in december. So they've passed two relief packages $900 billion and now another two trillion dollars and they are injecting money back into States and local governments and we see that clearly here on this particular chart Where it says Funding overview for pandemic oversight Right and this comes from pandemic oversight dot gov, which is a government funded website And this is where you can track all of the spending to date. So total pandemic response 2.6 trillion dollars state local and tribal governments $291 billion So again, that's a whole lot of money that they put right back into the states The point we're making is this That money right if we go back and it's offsetting these losses Which is allowing them to continue operating So if if they're projecting 155 and 167 billion dollars and the government dumped in 290 Right billion. So let's go back to this chart 290 billion dollars and again, it's not all the same That's helping offset The particular losses and it says here while federal aid state local governments this year has exceeded projected losses The aid is only one time and state local governments are expected to face shortfalls for many years And that's the point that we're making today. So the good thing is that all of you folks who've been working Getting paid even if it's a little bit late. You've still been getting paid They haven't abandoned you and that's the wonderful thing. So that's what's giving me hope about stake in local contracting The other thing that's given me hope about state and local contracting is the fact that We understand Biden is now attempting to pass a new 1.9 Trillion dollar stimulus package, which I'm sure is going to have a whole lot more money Into that for state and local governments. So again Going back to the point of the article, which is uh at the time when they wrote this article This was in september of 2020. There wasn't the second package that was passed By the former administration. So at this time of the article The initial package that was passed was sufficient to cover the 2020 losses And even some of the 2021 losses and we'll we'll take a look at that here in this particular chart where This is an interim reports cost that was released around august time and it showed how The states were spending their money. So it shows the payment amount to Uncurt cost and it shows the percent spent. So a lot of the states had not even spent in august 50% of their budgets as you can see alabama Alaska spent 28 percent, arizona 19 percent arkansas california they look they went through Colorado So you can see here in this chart by the treasury How the monies that were allocated how the the costs incurred how they've been able to spend and i'm sure it's It's just a matter of paperwork. So again having worked In government for a few months a lot of times what has to happen is they have to you know Charge it to a certain accounts and the codes and then we would rebuild for reimbursement back from the federal government So i'm sure that that's what's happening here. These are internal measures. The money probably has already Let me go to open up this bigger chart. The money has already probably been spent But they're now trying to allocate it to the right cost codes so that they can get the reimbursements from the government But the point of the matter is the the amount of money that's been allocated for state local government has not even all been used or exercised and We'll see that here in the december package that was passed the 900 billion dollar that was passed Or the 101.4 trillion that was passed in december We'll see here in that particular breakdown where it gave the Where's it at? Let me find it Okay, it offered an extension for state spending Right of the carers act money obviously into 2021 of december so it it the government recognized this was happening and What they did was they went ahead and the new package and said, okay, we're going to give states more time to go through and Basically, uh, it's spent all the money that we've allocated for them. So those Those factors give me a lot of hope and confidence to suggest to people that They can try state and local contracting and based on the path that we're on Everyone is going to continue to get paid even though they may get paid late just because paperwork bureaucracy the timing Somebody lazy someone then push a button someone went on vacation Even though they make it paid late They will get paid. So that gives me a lot of confidence And and again if we continue along this path That the new administration is forecasting the 1.9 trillion dollar path That's going to be even further Indication that we're going to continue Uh Actually allocating money and resources and propping up the state and local governments to continue buying services buying goods procuring Facilitating construction projects engineering projects professional services and things going now there is Okay, with all that said Uh, there is an issue where they've had to cut back and that's In this article is where they said a lot of the the the reason why The governments have Not they've received more funding than their money's allocated because they did in preparation A lot of the the local governments started cutting back. They stopped hiring people They start laying some people off and so that Reduced the amount of their budgets which allowed them to continue going because again Um, if you are a mayor or you're a city legislator You did not anticipate or you did not know when the government's funding or relief was going to come So you start making preparations to balance your books and balance your budgets Ahead of that time. So some Some of the the person's responsible did some really good first steps initial steps and measures To protect their economies From completely going bust and so that's helped Drive a lot of this what you see happening is now After these stimulus packages are passed or like, okay We're able to to bring those persons back and we're able to offset some of our our shortfalls in other areas So we can start hiring in other places and and that's really what happened But the point of the gist of this whole story is that If we continue along this trend along this path of bringing on Stimulus and propping up the economy if we continue along this path And that's great news for small business contractors who are considering starting at the the local level Maybe because they know people there maybe because it feels easier Maybe because their business is a localized type of business And it's easier to work in your own backyard than it would be to work, you know 20 miles down the road For whatever reason it may be. Maybe it's a financial situation Maybe it's past performance or experience or getting your feet wet for whatever reason That might be If this path continues, I see nothing but great news for small business contractors out there. So again, I definitely want to Let people know about what I thought In terms of what I was seeing out here Because again, all of these things matter. Believe it or not, it's bigger than a $600 check It's bigger than the taxing the rich. It's bigger than Looking at just the particular The farmers or the vaccine or testing and things like that Remember, we're here to talk or advocate on doing business with the government But again, if you know, if there are warning signs of things changing I definitely want to be here to step in and let people know about the changing climate and the changing environment And right now the way that things are going It looks like there's you know, the last administration wanted to do a good job And and prop up the government and prop up industry And and and rightly so because why it it was helpful with their reelection efforts The new administration wants to come in and they want to set the right tone and they want to Provide people with the encouragement that they're going to do a great job So they want to go out and pass their own stimulus package So regardless of the motivation behind why people are doing things They are in fact doing it. And so for that reason, I think that I would be confident in saying I see The state and local contracting Again, people must have capital You've got to have capital and you've got to have be able to sustain until you get pay But at the very least I don't see anytime soon the state local governments Being able to hang any small business out high and dry And I don't see any of the prime contracts being able to hang you out completely high and dry Because there is so much money flowing around there is so much stimulus and The government is making sure and and putting dollars and putting not just dollars but their voice behind Ensuring that they prop up small businesses to keep the economy flourishing. Thanks so much I hope this has helped someone out here Be able to better understand and navigate the waters and thank you clubhouse for giving me the ideas and the video content that I could make