From: mrbrklyn@panix.com   
      
   Recession Forces Spending Cuts on States, Cities Hit by Coronavirus   
   David Harrison   
   10-12 minutes   
      
   State and local governments from Georgia to California are cutting money   
   for schools, universities and other services as the coronavirus-induced   
   recession wreaks havoc on their finances.   
      
   Widespread job losses and closed businesses have reduced revenue from   
   sales and income taxes, forcing officials to make agonizing choices in   
   budgets for the new fiscal year, which started July 1 in much of the   
   country.   
      
   Governments have cut 1.5 million jobs since March, mostly in education,   
   and more reductions are likely barring a quick economic recovery. In   
   Washington state, some state workers will take unpaid furloughs. In   
   Idaho, Boise State University cut its baseball and swim teams in an   
   effort to save $3 million.   
      
   Dayton, Ohio, Mayor Nan Whaley says the city may have to cut up to 8% of   
   its general fund budget, which pays for fire, police, roads, water and   
   trash collection.   
      
   Dayton, Ohio, Mayor Nan Whaley says the city may have to cut up to 8% of   
   its general fund budget.   
   Photo: Maddie McGarvey for The Wall Street Journal   
      
   Im concerned well have to lay folks off before the end of the year, Ms.   
   Whaley said.   
      
   Nationwide protests sparked by the killing of George Floyd at the hands   
   of Minneapolis police have heightened attention to municipal budgeting.   
   In many cities, protesters are demanding that police budgets be cut or   
   money redirected toward social services.   
      
   Across the country, the weeks before July 1 were marked by a scramble to   
   complete spending plans. The task has been complicated by uncertainty   
   over the economic outlook, which depends largely on unknowns such as the   
   course of the virus and how quickly a vaccine can be developed. As a   
   result, budgets may have to be rewritten in the coming months.   
      
   I dont think you can overstate the amount of uncertainty that states are   
   dealing with, said Tracy Gordon, an expert on state and local budgets at   
   the Urban Institute in Washington. Youre asking revenue estimators   
   basically to consult epidemiological models and public health experts   
   and take account of all kinds of variables that are normally not part of   
   their forecasts.   
      
   Revenue VolatilityYear-over-year change in state and localquarterly tax   
   receipts.Source: Commerce Department   
      
   %RECESSION   
      
   2007'10'15'20-20-15-10-5051015   
      
   Adding to the uncertainty: Many states pushed back the income-tax-filing   
   deadline to July 15 from April 15, following the U.S. Treasurys lead.   
   While that should bring a short-term revenue boost, officials dont know   
   how much revenue to expect in the months ahead.   
      
   It is also unclear whether states will get more help from Congress,   
   which in March provided $150 billion but limited its use for pandemic   
   response. Dayton got about $8 million and will use it to buy face masks   
   for residents, Ms. Whaley said.   
      
   The National Governors Association says states need another $500 billion   
   in federal aid to make up for lost revenue. The U.S. Conference of   
   Mayors says cities need $250 billion.   
      
   The Democratic-led House in May passed a bill that included $1 trillion   
   to help state and local governments.   
      
   But Republican senators have paused discussion on another fiscal package   
   until later this month.   
      
   Why Another Coronavirus Stimulus Package May Be Tough to Craft   
      
   0:00 / 2:42   
      
   Why Another Coronavirus Stimulus Package May Be Tough to Craft   
      
   Why Another Coronavirus Stimulus Package May Be Tough to Craft   
   Congress is eager to pass the next phase of coronavirus stimulus   
   legislation, but the bipartisan spirit that was present months ago may   
   be frayed as both parties weigh their differences. WSJs Gerald F. Seib   
   explains. Photo: Eric Gay/Associated Press   
      
   Almost all states and local governments require balanced budgets. For   
   now, they have largely avoided raising taxes to plug budget holes,   
   opting instead to cut spending or dip into reserves.   
      
   In Georgia, Gov. Brian Kemp signed a budget bill that reduces spending   
   by about 10%, including a $950 million cut to the main state education   
   fund. Some poorer school districts rely on the state to cover 70% of   
   operating expenses, said Margaret Ciccarelli, director of legislative   
   services for Page Inc., the states teachers association.   
      
   These are challenging times and the budget reflects that reality, Mr.   
   Kemp, a Republican, said in a signing ceremony on June 30.   
      
   Maryland imposed $412 million in cuts, of which $136 million will come   
   from higher education, an 8% reduction. Funding was also reduced for   
   Washington, D.C.-area transit system, neighborhood revitalization and   
   drug treatment.   
      
   These are challenging times and the budget reflects that reality, said   
   Georgia Gov. Brian Kemp.   
   Photo: Elijah Nouvelage/Bloomberg News   
      
   Such cuts, though painful, could have been worse, experts say. The   
   decadelong economic expansion that ended in February allowed states to   
   replenish rainy-day funds. The median state went into the crisis with   
   reserves totaling a record 7.8% of its general fund budget, according to   
   the National Association of State Budget Officers.   
      
   California lawmakers used $9 billion of their $16 billion rainy-day fund   
   to help balance the $202 billion budget that Gov. Gavin Newsom, a   
   Democrat, signed June 29. Even so, state employees will have to take up   
   to two unpaid furlough days a month, and public colleges and   
   universities face about $602 million in reductions.   
      
   Some states are putting off hard decisions. New Jersey Gov. Phil Murphy,   
   a Democrat, signed a $7.6 billion stopgap budget for the next three   
   months, which cuts $1.2 billion in previously allocated spending.   
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   With an uncertain outlook, officials are trying to maintain reserves in   
   anticipation of more lean years.   
      
   You may need to use it in 2022 and beyond, said Brian Sigritz, director   
   of state fiscal studies at the budget officers association. Theyre not   
   expecting this decline to be a one-year or two-year thing.   
      
   The fiscal squeeze comes as cities face demands to cut police funding in   
   the wake of Mr. Floyds killing. Los Angeles redirected $150 million from   
   the police departments nearly $2 billion budget to social services.   
      
   In New York, Mayor Bill de Blasio and the City Council struck a deal   
   that he said would cut the police budget by about $1 billion, to $5.2   
   billion, and protesters are demanding even larger reductions.   
      
   The Atlanta City Council narrowly defeated a proposal to hold back some   
   police funding until the department presented a plan to become more   
   inclusive and transparent.   
      
   The Atlanta City Council narrowly defeated a proposal to hold back some   
   police funding.   
   Photo: Steve Eberhardt/Zuma Press   
      
   Most years, Atlanta council members hear two to three hours of public   
      
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