State and Local Governments Need Cash from Feds

State and local governments are struggling with stay at home orders reducing tax revenues. Without people working and buying things, income and sales taxes are drying up while state and local government expenses rise helping care for the millions afflicted by the coronavirus pandemic. The impact will be cuts in community services, like fire, policing, transportation and school budgets.

What do tight budgets mean to school leaders and will they have the resources needed to run an effective school operation, especially with the extra health and safety demands?

House Speaker Nancy Pelosi (D-Calif.) estimates state and local governments need $1 trillion combined to make up the shortfall. And while these governments got $150 billion in the March stimulus law, they need more. The $150 billion is in addition to aid to mass transit systems, schools and other local bodies.

“State and local governments employ approximately 20 million people, and making sure they have the resources they need is absolutely critical,” says first-term Rep. Jennifer Wexton (D-Va.). “Having classrooms with 50 kids in them won’t help you in a recovery,” Wexton said during a telephone press conference in early May.

President Trump has made it clear he doesn’t want to help the states and cities. Senate Majority Leader Mitch McConnell (R-Ky.) says they should declare bankruptcy. It’s his version of GOP President Gerald Ford’s infamous: “Ford to city: Drop dead!” order when the Big Apple went broke in 1975.

“Well-run states should not be bailing out poorly run states, using coronavirus as the excuse!” Trump tweeted. “The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions."

"Local unions will have a battle on their hands fighting off layoffs and efforts to kill pensions," said AFSA President Ernest Logan. "Our biggest fight, however, will be making sure we have the needed dollars to provide a top-notch education to the children we serve every day."