Far worse to come: COVID-19 collapse of state and local governments

The Hill ^ | 12 April 20 | Grady Means

[Bruiser 10]

Another sudden and unexpected factor will transform this year’s elections. Many states, cities and counties are about to, suddenly, run out of money. Wages won’t be paid. Services won’t be delivered. Institutions will shut down abruptly. Many state colleges may fold. And yet most state and local political and administrative leaders just sit and watch. Voters will not be pleased.

Millions of American workers filed for unemployment insurance during the past two weeks. That is a record and represents a collapse of our local economies. Across the country, in every state, county and city, businesses have been shut down, and many will not return after the coronavirus crisis is over. Tens of millions have lost jobs, homes, savings and retirement incomes that will never return. Owners of rental property will go under when their loan payments come due and renters can’t pay. Across the country, state and local economies are being badly damaged — many of them permanently.

The result is that state and local tax revenues will plummet. States and localities will burn through any reserves they’ve maintained like wildfire. Since most of our politicians and government managers have been raised during a decade of expanding economies, their first instinct will be to wait and then panic and then raise taxes to cover shortfalls — perhaps a special “coronavirus surtax.” Taxpayers across the country have tolerated various forms of high state and local taxes; the politicians would naturally ask, “Why should now be any different?”

[KC_Lion]

The Hill needs to take a chill pill.

[nralife]

Who would post crap like this?

[Buckeye McFrog]

All reasons why they will have EVERY incentive to open up their states and play nice with Trump.

[Fury]

I do think local government entities need to figure out what is truly essential.

For example, school districts. There may not be as many choices for students for sports. Extracurricular activities may need to be prioritized, etc. Labor contracts will need to be looked even more carefully. School districts can’t hand off a double-digit levy increase to taxpayers if unemployment is in the double digits, and expect those budgets to pass.

Touch choices to make.

[SteveH]

kamala harris was on cnn andersen this evening, talking about the “failed leadership,” how she is writing a letter with her colleagues to propose solutions, and the need for expansion of SNAP (EBT cards) since she claims that paychecks run the risk of being confiscated and EBT cards are the fastest way to get money to the people so that they can pay their rent.

Wait a second... Newsom ordered a tenant eviction ban effective immediately... so how does giving money through EBT cards...

[Daniel Ramsey]

Hawaii hired too many police....

[P.O.E.]

This is a golden opportunity for governments to do zero-based budgeting.

Start by only opening those entities that are truly essential.

Most of the rest should be phased out.

[Luke21]

The Hill never stops with the blue gas machine.

[raybbr]

It’s not the working budgets that are the problem. It’s pension plans. CT has an absurd debt of almost $100 billion in unfunded liabilities due mostly to state worker pension plans.

[DoodleBob]

This is a good place to post today's update to yesterday's inaugural tracking of COVID-19 deaths at the state level. I standardize each municipality's cumulative COVID-19 fatality count by its population, then multiply the resulting quotient by the US' population of 329MM to put everyone on a common/US scale. I then index each municipality's time-series to Day 1, where their size-adjusted fatality count is right before it breaches 1,000 people. This corrects for what I call the "Golf Problem" where broadcasts of the Masters etc have to show not only each golfer's score, but which hole they're at. I also list the Day 1 date and the population for reference.

Below are the data. Note for the US as nation, that Day 1 is March 25, which means Day 21 is April 14 for that row of data. You can do the math for the other municipalities to find out what Day XX means for them in calendar times; as a general rule, the last actual data point is the freshest date (i.e., Day 23 for Georgia is that state's COVID-19 cumulative population-adjusted fatality count for April 14), but on a Golf timeline it gives each municipality's score as of the "21th hole." The order is alphabetical.

As with yesterday, for Day 21 the states with the five highest adjusted fatalities are NY, NJ, MI, LA and CT, respectively. Meanwhile, Washington seems to have done a good job of jumping on the problem in early March, and California and Florida are doing extremely well even though they're a few holes behind the rest of the golfers. Please pray for eveyrone impacted by this saga.

Municipality	Date of Day 1 = day prior to breaching size-adj 1,000 COVID19 fatalities	Population (MM)	Day 14	Day 15	Day 16	Day 17	Day 18	Day 19	Day 20	Day 21	Day 22	Day 23	Day 24
New York	3/20/20	19.8	44,167	48,861	59,399	69,271	79,210	92,612	104,348	117,650	130,585	143,621	156,240
New Jersey	3/23/20	9.0	33,736	36,973	45,324	55,331	62,541	71,076	80,310	86,454	89,876	103,193	-
Michigan	3/24/20	9.9	24,146	28,065	31,851	35,737	42,512	46,199	49,354	53,174	58,654	-	-
Connecticut	3/23/20	3.6	17,346	18,906	25,422	30,745	34,875	41,116	45,337	50,844	55,249	61,582	-
Louisiana	3/20/20	4.7	21,873	26,106	29,070	33,656	36,126	41,065	46,004	49,532	53,271	56,870	59,269
Massachusetts	3/25/20	6.8	17,267	21,002	24,397	29,054	33,274	36,669	40,937	46,418	-	-	-
United States	3/25/20	329.6	12,722	14,695	16,478	18,586	20,463	22,020	23,529	25,832	-	-	-
District of Columbia	3/24/20	0.7	11,766	10,785	13,237	15,688	18,629	23,042	24,512	25,493	32,846	-	-
Colorado	3/24/20	5.5	9,059	10,811	11,596	13,710	15,280	16,549	17,515	18,602	19,870	-	-
Georgia	3/23/20	10.2	7,065	9,485	11,227	11,937	13,292	13,712	13,937	14,131	15,454	16,680	-
Nevada	3/24/20	2.9	6,612	6,840	9,120	9,348	9,804	12,654	12,882	12,996	14,820	-	-
Vermont	3/18/20	0.6	6,843	8,423	8,949	8,949	10,528	11,581	12,107	12,107	12,107	12,107	12,634
Washington	3/8/20	7.2	4,366	4,458	5,056	5,653	5,975	6,940	8,135	8,779	9,514	10,157	10,387
Indiana	3/26/20	6.6	10,106	12,247	14,935	16,429	17,076	17,425	19,267	-	-	-	-
Illinois	3/27/20	12.9	13,685	15,555	17,477	18,630	20,501	22,500	-	-	-	-	-
Delaware	3/27/20	0.9	8,013	11,149	11,497	12,194	14,284	14,981	-	-	-	-	-
Mississippi	3/27/20	3.0	8,370	9,031	10,242	10,573	10,793	12,225	-	-	-	-	-
Oklahoma	3/27/20	3.9	6,741	7,415	7,836	8,089	8,257	9,184	-	-	-	-	-
California	3/27/20	39.1	4,614	5,001	5,321	5,691	6,104	6,550	-	-	-	-	-
South Carolina	3/27/20	4.9	4,510	4,846	5,385	5,519	5,856	6,529	-	-	-	-	-
Oregon	3/27/20	4.0	3,599	3,926	4,172	4,253	4,335	4,499	-	-	-	-	-
Alabama	3/31/20	4.9	7,054	7,732	-	-	-	-	-	-	-	-	-
Alaska	4/3/20	0.7	-	-	-	-	-	-	-	-	-	-	-
Arizona	3/30/20	6.8	5,647	5,888	6,323	-	-	-	-	-	-	-	-
Arkansas	3/31/20	3.0	3,320	3,541	-	-	-	-	-	-	-	-	-
Florida	3/29/20	20.3	7,235	7,478	8,096	9,267	-	-	-	-	-	-	-
Hawaii	4/5/20	1.4	-	-	-	-	-	-	-	-	-	-	-
Idaho	3/28/20	1.7	4,978	5,377	5,377	6,571	7,766	-	-	-	-	-	-
Iowa	4/1/20	3.1	4,642	-	-	-	-	-	-	-	-	-	-
Kansas	3/29/20	2.9	6,225	6,338	7,131	7,810	-	-	-	-	-	-	-
Kentucky	3/30/20	4.4	7,298	7,894	8,565	-	-	-	-	-	-	-	-
Maine	3/30/20	1.3	4,710	4,710	4,958	-	-	-	-	-	-	-	-
Maryland	3/31/20	6.0	14,375	16,570	-	-	-	-	-	-	-	-	-
Minnesota	3/31/20	5.5	4,202	4,743	-	-	-	-	-	-	-	-	-
Missouri	4/1/20	6.1	8,234	-	-	-	-	-	-	-	-	-	-
Montana	3/29/20	1.0	1,914	1,914	2,233	2,233	-	-	-	-	-	-	-
Nebraska	4/1/20	1.9	3,650	-	-	-	-	-	-	-	-	-	-
New Hampshire	4/1/20	1.3	6,687	-	-	-	-	-	-	-	-	-	-
New Mexico	4/1/20	2.1	5,690	-	-	-	-	-	-	-	-	-	-
North Carolina	4/4/20	10.0	-	-	-	-	-	-	-	-	-	-	-
North Dakota	3/29/20	0.8	3,048	3,483	3,918	3,918	-	-	-	-	-	-	-
Ohio	3/29/20	11.6	7,009	7,179	7,775	9,193	-	-	-	-	-	-	-
Pennsylvania	3/28/20	12.8	11,198	13,257	13,514	14,492	19,203	-	-	-	-	-	-
Puerto Rico	4/1/20	3.7	4,030	-	-	-	-	-	-	-	-	-	-
Rhode Island	3/29/20	1.1	17,472	19,655	22,775	24,959	-	-	-	-	-	-	-
South Dakota	4/5/20	0.9	-	-	-	-	-	-	-	-	-	-	-
Tennessee	3/31/20	6.6	5,692	6,141	-	-	-	-	-	-	-	-	-
Texas	4/2/20	27.5	-	-	-	-	-	-	-	-	-	-	-
Utah	4/5/20	3.0	-	-	-	-	-	-	-	-	-	-	-
Virginia	3/29/20	8.4	5,111	5,543	5,858	6,054	-	-	-	-	-	-	-
West Virginia	4/10/20	1.8	-	-	-	-	-	-	-	-	-	-	-
Wisconsin	3/29/20	5.8	8,051	8,280	8,851	9,822	-	-	-	-	-	-	-
Wyoming	4/13/20	0.6	-	-	-	-	-	-	-	-	-	-	-

[wildcard_redneck]

To hell with government workers, their gold plated retirement plans, and guaranteed jobs. It’s about time they felt the pain we suffer.

[richardtavor]

An even greater consequence will be a pandemic of Dishpan hands from all of the handwashing.

[The Great RJ]

Econonic collapse will crush big spending high tax states like California and New York. However in other states this could be a golden opportunity to oust big tax liberal governments.

[Varsity Flight]

Phase 2:
Under W. Comp a shortfall will have to be addressed by the Ohio General Assembly. Possibly asking more $$ from employers. OH. Lt. Gov.

[Fury]

It’s pension plans.

Good point. Defined benefit plans.

That and Other Post Employment Benefits (OPEB). Things like retiree health care.

[bagman]

Exactly - the lack of revenues is going to force the re-opening of commerce. Unlike the Federal government, most (if not all) states have to have balanced annual budgets.

And now, puff, they no longer have them.

[Bonemaker]

“Voters will not be pleased.”

That’s an understatement.

[RasterMaster]

Only the LIEberal states that failed to prepare.

[Varsity Flight]

And if have to layoffs to compensate, raise COGS, and/or prices, will continue to slow the velocity of $$.