Fiscal aid needed for state governments

Fiscal aid needed for state governments

The coronavirus presents an unprecedented challenge to state governments, with public health and economic crises poised to hit every state at once. A team of subject-area experts at the Center on Budget and Policy Priorities offers a list of policy recommendations to meet these profound economic challenges. Among their recommendations: using massive transfers of federal money to stabilize teetering state budgets.

During the last recession, states faced budget shortfalls totaling about $600 billion. The Recovery Act’s FMAP provisions (addressing the federal share of Medicaid funding) provided roughly $100 billion in fiscal relief — a big help, but well short of what it would have taken for states to avoid laying off teachers and other workers and cutting services in other ways that deepened the recession. Increasing the FMAP is the single most important way to get fiscal relief efficiently to states, but Congress should also enact additional emergency fiscal aid to states. We recommend that this added fiscal relief take a similar form to the Recovery Act’s State Fiscal Stabilization Fund (SFSF), which provided roughly $60 billion in fiscal aid to states.


Unemployment soars in pandemic
In an average week before the coronavirus, 1,700 Louisianans filed for unemployment benefits. This week, 30,000 people had applied for benefits as of Thursday. The Advocate’s Tyler Bridges explains how the coronavirus is keeping Louisiana’s workers off the job, and why New Orleans is one of the hardest hit cities in the nation:

The carnage has been swift. For example, the union that represents stagehands in New Orleans – the International Alliance of Theatrical Stage Employees – has gone from 100 workers employed to zero over the past two weeks. “It’s very much like [Hurricane] Katrina,” said Alan Arthur, the union’s business agent. “The difference is that after Katrina you could leave the city and go somewhere else to find a job. You can’t do that now.”


USDA undecided on food stamp purge
While America’s economy craters, the U.S. Department of Agriculture remains undecided on whether to push ahead with an attempt to take food assistance away from childless, non-disabled adults who can’t find 80 hours of work a month. A federal judge stopped the agency’s proposal from taking effect last week, writing that the agency’s attempt to alter the rules of the Supplemental Nutrition Assistance Program (SNAP, better known as Food Stamps) was likely “arbitrary and capricious.” The AP’s Ashraf Khalil reports that while federal legislation blocks the harsh time limit from taking effect during the coronavirus crisis, nothing would prevent the program’s new rules from kicking people off of food benefits before the economy recovers:

(I)ndividual states have had the ability to waive that work requirement and time limit for areas of the state that have high unemployment rates. The changes, championed by Perdue, would have taken that waiver ability from the states, starting April 1. Estimates from the Agriculture Department set the number of people who would be removed from the program at approximately 700,000. What remains unclear is what will happen later this year when the pandemic crisis presumably passes. The USDA official said the agency has until mid-May to decide whether or not to appeal Howell’s ruling.


Living through a pandemic in poverty
Nearly every school district in Louisiana is offering free meals to students for pickup or, in some cases, for delivery. The same thing is happening elsewhere. Manny Fernandez reports in the New York Times profiles the Mossberger family in rural Texas, for whom these meals are a lifeline.

Poverty experts said that in times of natural disasters and large-scale emergencies, low-income families who are already living on tight budgets with overdue bills, unstable housing, poor health care and unsteady employment often bear the brunt of the pain. “They tend to be the first hit when things go wrong and then also to take the longest time to recover,” said H. Luke Shaefer, a professor of social work and public policy at the University of Michigan and the faculty director of its Poverty Solutions initiative. 

In 2018, when the state’s economy was relatively robust, 286,530 Louisiana children lived in poverty—27% of all children in the state.


Didja Know? Podcast: March 19, 2020
In this episode, LBP’s Davante Lewis, Jan Moller and Danny Mintz give updates on how the coronavirus is affecting Louisiana: the suspension of the Legislature, what the economic recession will do to the state budget and how food assistance programs are a key part of the state’s response. Click here to listen.


Number of the Day
71,452 – Estimated number of jobs Louisiana stands to lose due to the coronavirus. (Source: Economic Policy Institute)