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U.S. NEWS Monday 16 March 2020
States turn to

cash reserves

as coronavirus

strains budgets

JEFFERSON CITY, Mo (AP) — ly older adults and people New York Governor Andrew Cuomo speaks during a news con-
States across the U.S. are with existing health prob- ference at a COVID-19 coronavirus infection testing facility at
allocating hundreds of mil- lems, it can cause more se- Glen Island Park, Friday, March 13, 2020, in New Rochelle, N.Y.
lions of dollars to respond vere illness, including pneu- Associated Press
to the coronavirus, even as monia.
the U.S. government pre- State and local public penditures. That's a record deaths, lawmakers this past
pares to send billions more health agencies have high that was way up from week approved a budget
their way. been on the front lines of a 1.6% share of general that draws $200 million from
Many states have built up the response, monitoring fund expenditures in the the state's rainy day fund.
sizable stockpiles in their and testing those suspect- 2010 fiscal year, accord- Of that, $175 million is to go
"rainy day" funds during ed of having the virus that ing to the budget officers to the public health system
several robust years of tax causes the COVID-19 dis- group. with the rest going to a spe-
collections. Some gover- ease. Costs are mounting In Washington state, which cial unemployment fund
nors and state lawmakers for staff time and medical has seen the greatest num- for affected businesses and
now are tapping into those supplies. ber of U.S. coronavirus workers.q
savings for emergency ex- But states also are brac-
penses. Others are looking ing for a potential ripple
to set aside even more in effect on their revenues.
reserve, fearing the eco- The cancellation of major
nomic uncertainties stem- sporting and entertainment
ming from the coronavirus events could mean less
could send tax revenues tax revenue from tourists
into a tailspin. and local residents. Direc-
"Forget the closure on tives to work and study at
Broadway — the loss of rev- home instead of at offices,
enue to the state govern- schools and colleges could
ment, right now, is incalcu- mean less revenue from
lable," said New York Gov. fuel taxes and public tran-
Andrew Cuomo, a Demo- sit fares. And if some em-
crat. ployees can't go to work,
He pulled the curtain on that could put a damper
Broadway theaters this on state income and with-
past week while banning holding taxes while driv-
gatherings of 500 or more ing up spending for public
people. welfare programs such as
President Donald Trump unemployment insurance
said Friday that he would and state Medicaid health
free up as much as $50 care programs.
billion for state and local "It definitely has the poten-
governments as he de- tial to have a significant
clared the virus pandemic impact on state budgets —
a national emergency. both on the spending and
Many governors also have revenue side," said Brian
declared emergencies, Sigritz, director of state fis-
giving themselves greater cal studies at the National
flexibility to spend money Association of State Budget
and waive regulations as Officers.
needed. "One positive, if you want
"All the resources we can to use that word, is that this
have on hand — to make is coming after a period
sure if things get worse — where states have seen
we want," said Missouri Gov. strong revenue growth for
Mike Parson, a Republican, the past couple of years ...
while announcing a state and have been able to in-
of emergency just hours af- crease the size of their rainy
ter the president did so. day funds and reserves,"
For most people, the new Sigritz added.
coronavirus causes only Across all states last fis-
mild or moderate symp- cal year, the median rainy
toms, such as fever and day fund balance equaled
cough. For some, especial- 7.6% of general fund ex-