As a brand-new governor taking office during the Great Recession, I was forced to present a balanced budget at a time when Delaware was losing 9 percent of its jobs and revenues were declining by even more from what we had expected just a few months earlier. Policymakers across the country viewed these figures as once-in-a-lifetime levels of catastrophic challenge.
Ultimately, we balanced our budget through significant cuts and record tax increases, as well as federal aid. We furloughed state employees, cut aid to educational institutions and reduced spending throughout state government.
As painful as all of that was, it may well end up paling in comparison to the impact of the coronavirus pandemic on our economy. More than 26 million Americans have filed unemployment claims in the last five weeks, compared to 8.8 million jobs lost during the entirety of the Great Recession. And it's increasingly clear that many of these current jobs won't be coming back anytime soon — or ever, if many businesses close their doors altogether.
It's exactly when government revenues decline as a result of people losing their jobs that more government support is needed for Medicaid, protecting children from abuse, helping those suffering from addictions and the like. So states must try to address an increased need for services just when policymakers must cut their budgets.
In the face of these massive challenges, we now learn that the Trump administration is holding back on providing additional support to state and local governments because it fears that state political leaders would then have a disincentive to re-open their economies.
Governors of both parties invariably campaign on the idea of being their state's "jobs governor." It's ludicrous to suggest that a short-term bump in federal support would diminish their eagerness to get people back to work. A sustained strong private-sector economy is the only thing that enables our elected leaders to invest in the things we all care about: high-quality health care, a great education for all, sufficient public safety and quality of life.
Governors certainly want to re-open their economies as soon as they feel confident they can do so without overloading their health-care systems and without putting people's lives at risk. But in the meantime they need federal support, and they need it quickly. We are already reading about governors, as well as mayors and county executives, who are having to make significant cuts to police, sanitation, schools, health clinics and more.
These cuts are dangerous to citizens. But they shouldn't be necessary. The economic crisis has been brought about through no fault of state and local leaders or their constituents. Critically, unlike the federal government, states can't simply print money or deficit-spend.
The funds designated to support state and local governments in the previous round of stimulus investments were insufficient but at least a start, particularly if states gain more flexibility to spend those funds where they are most needed, not just on COVID-19-related expenses. Flexibility in addition to more funds will help governors avoid having to make deep cuts that would set back their constituents for years to come.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
