The Need for Shoring Up State and Local Government Operations
The unprecedented nature of the coronavirus pandemic means that unexpected consequences may be felt around the world for years to come. In a recent article for Governing, Ronald Fisher examines one such area of potentially unforeseen consequence, writing that “state and local governments’ severe fiscal problems could cause the recession to drag on longer than otherwise while also hurting public services.”
It is easy to forget that state and local governments make up one of the largest industries in the nation and, therefore, have a large impact on both local and national economies. The author fears that legislators are overlooking the fact that government organizations employ millions of workers, including a large swathe of front-line workers. Additionally, these government entities also contribute to the economy in the form of purchasing goods and services from private businesses.
Failure to provide adequate financial support to state and local governments leaves them alone in facing enormous budget shortfalls and steep revenue declines. On top of these challenges, many government agencies are being called upon to provide additional services in response to the pandemic. “Even a 5 percent cut in state and local employment and spending could mean 950,000 more unemployed or furloughed workers and $100 billion less in purchasing from private business,” warns Fisher. The long term impact of failing to provide additional aid to state and local governments is likely to be quite costly.
For more details, click here to read the article in full at Governing.