Most people think the run to get things back running by local and state officials after the virus restrictions is about just commercial and retail business…
But behind all that is a more basic worry for government officials ….
Unlike Donald Trump?
State and local government’s do NOT print money….
They get their revenue from the taxpayers and the federal government…
There have been money programs for the state and local governments , but that is simply NOT gonna plug in ALL the missed revenue from people NOT paying payroll taxes, sale taxes from consumer buying, transportation taxes from tolls and other fee’s, and real estate taxes from commercial landlords who have business that have shut down for several months…
New York City and New York State will have holes in their budget revenue income in the Billions…..
All this will mean that states and local governments will iinstitude budget cuts and even some layoff of workers at a time when there is a effort to get MORE people BACK to work….
Caught in the mix are the teachers and bus drivers, bureaucrats and police officers who make up the spine of the nation’s day-to-day life. In Honolulu, the Governor has proposed a 20% pay cut to public sector workers, including teachers. Los Angeles is requiring city employees to take 26 days — five weeks — of unpaid leave to help offset shriveling tax revenue. In Detroit, there’s talk of furloughing thousands of workers to patch a budget hole. Pennsylvania is telling employees like highway workers who can’t telework to use up vacation and sick leave to keep their checks coming.
The nation’s last major economic crisis, the 2008 financial meltdown, forced state and local governments to shed 3% of their workforce, or almost 600,000 jobs. Half of them were teachers. And while the state and local employees saw less of a slash than their private-sector peers, public jobs have been slower to come back, and have yet to match pre-2008 levels.
Coronavirus’ impact on states is almost certainly going to be worse. The non-partisan Center on Budget and Policy Priorities estimates states could face a half-trillion hole in their budgets over the next two years. The nation’s Governors are asking for that $500 billion to come from Congress soon. The nation’s largest public-sector union — the 1.4 million-member American Federation of State, County and Municipal Employees — is asking for $700 billion.
“If we don’t get this kind of support from the federal government, there are going to be layoffs. There are going to cutbacks in public services,” says AFSCME President Lee Saunders. “The people who have been risking their lives actually will get pink slips. The American people will not put up with that,” he says.
When states go broke, it’s not just the clerk at the DMV taking the hit. Downstream, millions of more jobs are covered in part by state budgets at non-profit groups, which as a whole make up the third-largest sector of the U.S. economy, behind only manufacturing and retail. “If the federal government doesn’t provide significant relief to the state government, then you’re going to see a significant drop in funding for non-profits,” warns United Way Worldwide President and CEO Brian Gallagher. While there’s often an uptick in charitable contributions during a crisis, it’s usually insufficient. After all, roughly one-third of nonprofits’ budgets come from state grants and contracts, according to the National Council of Nonprofits. “There is no doubt in my mind that there are going to be non-profits that go out of business and don’t survive this crisis,” Gallagher says.
Before coronavirus, states were ramping up their spending based on the strength of the economy….
No we haven’t and that might be the elephant in the room as regards declining unemployment numbers.
The vast majority of government budgets,at any level, is in personnel.Yes there are other expenses of course, but even cutting out all of those( impossible), would still leave those budgets substantially out of balance.
Where to cut next?Personnel of course.The question remains how deep these cuts may be .Predictions are all over the place .They are coming though and ,in many cases ,soon(many governments operate off a July 1-July 1fiscal year) .
The effect on unemployment numbers remains to be seen.
Agreed on the government cuts…
Companies have ALREADY done some and will do more…
And?
Added to this is real estate…
Having seen that a LOT of places CAN operate with employee’s from home?
Why have so MUCH high priced office space in central cities?
Those cutbacks will affect small b business which is the base of the American economy…NOT the mega companies…
Things ARE gonna keep playing out towards the negative like the Fed Chief just announced…
Yeah, budgets are going to get cut unless money comes down hill from the Feds…
The Money the Feds provided were for Corona Virus Related Expenditures (healthcare, EMS, etc), but not for everyday functioning of government, but with the tremendous amount of revenue lost to the states and localities it is going to be a blood bath…the Heroes act gave up nearly a trillion to the states, that would stave off the worse, but we all know since that is really about saving jobs in places that don’t vote Republican it is an uphill battle to get that…of course there are some places that due vote Republican and will get hurt by the government cuts, but unfortunately too many in government don’t realize how little the Republican Party is in support of them and their unions…This was made clear to me in a Union meeting once…this Trumpian Nurse was spouting off how her father and grandfather were proud Union people and she was too, but just from her mannerisms I already knew she was a Trumpet ( I never met her before) and I asked her who she supported in the election she said Trump, and I said that is the reason we are having this meeting because it was about the Janus Case before the Supreme Court three years ago, and I said you understand your vote to vote Trump in is now the reason he nominated two conservative justices that ruled against the Unions in that case and now our union is potentially in jeopardy…her face was classic, and her reply, well I wasn’t informed about this…needless to say I held my tongue or I would have jumped so far down her throat they would still be pulling pieces of me out of her…
Sounds like the knuckleheads who ranted AGAINST the Affordable Care Act while they where ON Obamacare…..