The city of Dayton, Ohio, furloughed more than a quarter of its workforce. New York City won't provide summer jobs to 75,000 youth and will keep its public pools shuttered.
The economic crisis wrought by the coronavirus pandemic is hammering state and local governments. With the majority of businesses shuttered in many states and tens of millions of workers filing for unemployment, states and cities are seeing their tax revenues dry up rapidly. That's opening gaping holes in their budgets for fiscal 2020 and fiscal 2021, which begins July 1 in most states.
"I would certainly be in favor of allowing states to use the bankruptcy route," McConnell told Hugh Hewitt in a radio interview."It saves some cities. And there's no good reason for it not to be available." Democrats have said they hope to pass another coronavirus relief package that would potentially include assistance to state and local governments.While one prominent former Republican governor, Nikki Haley of South Carolina -- who also served as President Donald Trump's UN ambassador -- publicly chastised states for fiscal mismanagement, states have in fact spent the last few years building up their rainy day funds to an all-time total high.
Another analysis found that states could face shortfalls of $360 billion or more, even accounting for rainy day funds and federal aid, according to a recent Center for Budget and Policy Priorities report. Recognizing that states and municipalities are suffering financially in the pandemic, the federal government has already moved to help them. Congress included $150 billion in aid in the $2 trillion relief package that passed in late March. However, it can only be used to cover expenses incurred due to the public health emergency, not revenue issues, and is only open to large cities and counties.
The latter two groups issued a joint report last week saying that 98% of mid-size cities project a revenue shortfall this year, with 38% of them expecting to lay off workers and just over half forecasting that police and public safety will be cut.Dayton is one city that could use more federal aid. It is seeing"pretty significant losses" in March revenues and is concerned about April too, said Mayor Nan Whaley, a Democrat.
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