Coronavirus Live Updates: As Pandemic Ravages Budgets, States Cut and Borrow to Balance Books
Coronavirus live update
As the virus devastates tax revenues, states must follow balanced-budget laws.
In February, Ohio was running a $200 million budget surplus. Then the coronavirus pandemic struck, and two months later — as tax revenue plummeted and public health expenses skyrocketed — the state was facing a $777 million hole.
Gov. Mike DeWine, a Republican, ordered immediate cuts to close the gap. He had no choice. The pandemic, Mr. DeWine said, “does not exempt us from balancing our budget, which we are legally obligated to do.”
Ohio is hardly alone. Every state is grappling with a version of the same problem, and all but one — Vermont — have balanced-budget laws in place. And for most, the new fiscal year starts on July 1, leaving them desperate for help with just a few weeks to come up with a plan.
A coalition of five Democratic governors said on Monday that state and local governments needed $1 trillion in federal relief or they would be forced to decide between funding public health care programs or laying off teachers, police officers and other workers.
Democrats in Washington have supported those requests, but some Republicans — including President Trump — have suggested that Democratic-controlled states are seeking a bailout for poor decisions that predate the pandemic.
The problem is that balanced-budget laws have left states with few options. And the coronavirus adds to the strain every day: Stay-at-home orders and frozen economic activity have slashed state sales- and income-tax revenue, and services that are largely unused, like airports and public transit, still must be maintained.
Georgia has instructed all state agencies to cut spending by 14 percent by May 20. California has already borrowed $348 million, and Gov. Gavin Newsom on Thursday proposed steep cuts to public schools and universities and health care as part of a revised budget.
The new California budget would cut spending by 9 percent over all, but like Mr. DeWine, Mr. Newsom said he had little choice.
“Our state is in an unprecedented emergency, facing massive job losses and shortfalls in record time,” he wrote in a letter to legislators. “This budget reflects that emergency.”
In swing states, reopening deepens the political divide.
In Wisconsin, residents woke up to a state of confusion on Thursday after the conservative majority on the State Supreme Court sided with the Republican majority in the Legislature on Wednesday night, overturning a statewide stay-at-home order issued by Gov. Tony Evers, a Democrat.
In Michigan, hundreds of protesters, many of them armed, turned out at the State Capitol in a drenching rainstorm after the state had closed the Capitol and canceled the legislative session after threats directed toward Gov. Gretchen Whitmer. (Amber McCann, a spokeswoman for the Senate majority leader, Mike Shirkey, said that while some senators were concerned for their safety, that was not the main reason for canceling the session.)
And in Pennsylvania, some county lawmakers defied the Democratic governor’s orders to keep nonessential businesses closed, and President Trump flew to Allentown for a politically charged visit to a medical supply facility.
“You have the one group that’s like, ‘Yay!’” said Patty Schachtner, a Democratic state senator from western Wisconsin. “And the other group is like, ‘Man, life just got complicated.’”
In the three states that determined the 2016 presidential election — and could determine the one in 2020 — the response to the coronavirus is becoming a confused and agitated blend of health guidance, protest and partisan politics, leaving residents to fend for themselves.
“My anxiety for this pandemic is not having a unified plan, that we’re all on the same page, and listening to science and the same rules,” said Jamie O’Brien, 40, who owns a hair salon in Madison, Wis., that remains closed because of a local stay-at-home order.
Across Wisconsin, the court ruling left some residents in a festive mood; they headed to taverns to celebrate. Others were determined to stay home, just as they had been doing, worried that it was too soon to return to crowded restaurants and shops.
It was a microcosm of a country increasingly unable to separate bitter political divisions from plans to battle a deadly disease.
Democratic governors in Wisconsin, Michigan and Pennsylvania, backed by public health experts, have urged caution before reopening. Republican legislatures in those states have been pushing in the opposite direction, arguing that the extended restrictions are threatening their personal freedoms.
The White House threatens to veto a $3 trillion relief bill.
The White House threatened to veto a $3 trillion pandemic relief bill that Democrats planned to push through the House on Friday, as Republicans urged their members to reject a measure that they said was a nonstarter.
In a message to the House on Thursday, White House officials called the legislation insupportable and said Democrats who drafted it were “more concerned with delivering on longstanding partisan and ideological wish lists than with enhancing the ability of our nation to deal with the public health and economic challenges we face.”
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