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….