Why Lockdowns Don’t Work; Inadequate COVID Stimulus Is Pushing Cities and States to Make Draconian Cuts

or the last nine months, as the COVID crisis has deepened, cities and states have stared down a growing financial apocalypse. In the first bloom of the crisis, those cities and states that had managed to put aside extra dollars during nearly a decade of economic growth used up their hard-won rainy-day funds; then they began juggling numbers, using accounting tricks to lower current spending obligations without actually reducing jobs and services; and then, when they ran through their grab bag of tricks, they had to begin cutting services.

When the COVID crisis hit, all of the vulnerabilities that had been growing, largely unnoticed, beneath much of the U.S.’s urban surface for several years burst forth into the open. The math is pretty straightforward. As tourism, hotels, restaurants, entertainment venues, ticket sales to sports events, conventions and so forth have dried up in the face of the pandemic, government revenues have imploded: less jobs and less consumption means less income tax and less sales tax revenues. And that, in turn, means cuts to jobs and services at the city and state level. All of this feeds into a downward cycle by further reducing tax revenues and consumption, and further reducing the amount of money that cash-strapped states can send to their cities, most of which are barred by state laws from running deficits from one year to the next.

In April and May, 1.5 million workers were either laid off or furloughed by state and local governments around the country. Back then, the National League of Cities found that 2,100 cities were facing budget shortfalls and strategizing ways to impose cuts to make up for these lost dollars. Since then, that number has almost certainly increased.

Truthout Inadequate COVID Stimulus Is Pushing Cities and States to Make Draconian Cuts