I’m sure that most Governors are nice people. Their wants are simple, rent free housing in a mansion, chauffeur driven limousine, applause every time that they poke their heads out, and Super PAC dark money to tide them over between gigs. I’m no psychic, but I’m pretty sure that managing a brutal health care pandemic crisis wasn’t on their radar when they decided to run for Governor. Most certainly not a health care crisis they’re slogging through with an uncaring and largely unresponsive federal government. These people are trying to navigate a minefield without a stick to poke in the ground in front of them, and most of them are doing a heroic job. But as a consequence, while they are fighting the corona-virus tooth and nail, through no fault of their own they have already lost a battle that will haunt them long after the pandemic is over with. While they are fighting this fight, state Governors are burning through money like a drunken rock star. Obviously that is not the concern of the moment, as life takes precedence. But it is also something that is not immediately noticeable, for a simple reason. They are spending fiscal year 2020 money, money collected and allocated in 2019 by the state. But sooner or later fiscal 2020 is going to run out. For the sake of simplicity in this example, let’s just say that the coronavirus is a one-and-done. It burns itself out sometime in June, or early July, and does not make a reunion tour reappearance in the fall. By late July, some kind of normalcy will once again at least begin to settle back into most states, obviously with the worst effected ones lagging the furthest behind. Unfortunately, with very little time to even take a breath, many states are going to immediately be thrust back into another crisis, this one a financial crisis. Very few states fund a 1/1-12/31 fiscal calendar year. When the US congress comes back to work in September, they have to hammer out the fiscal budget for 2021 in the middle of an election year. And for most states, the fiscal budget process is when the economic hardships of the coronavirus will be most immediately felt. Most states generate operating revenue two ways, federal spending to the states, and tax revenue. Most federal income is assigned, block grants for Medicaid, education funding, infrastructure, housing assistance, that kind of thing. But normal state operating funds come from tax collection, state income tax, property taxes, sales tax, and gas tax. And that’s where the rub comes in. While the stay at home orders are in place, and while all non essential business are closed, it creates a severe hardship for people, but it is also creating a hardship for the states. People not getting paid are not paying state income taxes. Stores being closed means no sales tax revenue. And because nobody is driving back and forth to work, or making any other side trips for that matter, gas sales are down, which means a drop in revenue from the state gasoline sales tax. My adopted home state of Nevada is an interesting case study, although not typical. When we moved to Vegas, I was shocked. Nevada has no state income tax, Illinois had a hefty one. Nevada […]
Donald Trump’s personal bankruptcy experience applied to the US economy. Goverment borrows a record amount of money in the first quarter, but tax cuts! Earlier on Monday the Treasury said net borrowing totaled $488 billion from January through...
Sometimes people in Washington get it plain wrong!
If conservatives support police killing citizens without justification, climate denial, fact denial, science denial, racist and misogynistic behavior, or a litany of other absurd points of view about numerous important issues, we call them out.