Coronavirus and the state budget

Coronavirus and the state budget

Louisiana’s state government is projected to get $1.8 billion in short-term fiscal relief from the federal CARES Act that Congress approved last month, plus an additional $502 million to support education programs. The Advocate’s Mark Ballard reports that state officials are trying their best to figure out how that money can be used.

The general understanding is that federal money can be used to pay COVID-19 expenses — and not to replace state revenue losses. Gov. John Bel Edwards said he expects “tremendous flexibility” on the expenditures for which the federal money can be used. 

The | Baton Rouge Advocate editorial board says legislators should set aside all but the most urgent business when they return later this spring. 

Among the new variables are lost sales tax from shuttered retailers, closed casinos, and sharply reduced oil prices; federal aid to combat the crisis that comes with complicated rules; and the vast, sudden shift in Louisiana’s employment picture. The panel that determines how much the state can spend hasn’t even decided when it will adopt the formal revenue estimate used to prepare a budget for the fiscal year that starts July 1.

Reality check: The most pressing need for the Legislature, when it returns, will be to recalibrate the current-year budget that runs through June 30. While no one knows when and how Louisiana’s economy will rebound during the next budget year, it’s already clear that this year’s revenues will come in far below earlier projections. Much of the federal stimulus will likely be plugged into this year’s supplemental budget bill to ensure that teachers, hospitals, social workers and others continue to get paid. Should the state finish the fiscal year with a deficit, it will only add to next year’s budget problems. 

LBP Executive Director Jan Moller discussed the economic fallout from the pandemic last week in the Behind the Lens podcast. 


The fragile safety net
The new coronavirus pandemic has exposed the frayed – or nonexistent – social safety net that lies between millions of American workers and financial destitution. For many hospitality workers who live paycheck to paycheck, the $1,200 government checks that will be coming soon won’t be nearly enough to pay monthly expenses. CNN’s Maeve Reston profiles Walter Almendarez, who until recently worked as a bellman at the famed Chateau Marmont in Los Angeles. 

Last week, Almendarez was among 2,500 workers who drove to a mobile pantry distribution organized by the Los Angeles Federation of Labor to pick up a box filled with rice, pasta, powdered milk and plums, provided by the Los Angeles Regional Food Bank. He wasn’t able to make the $1,500 payment due Wednesday on the family’s rent-to-own house in Palmdale. And Tuesday brought a new anxiety for his wife: he said it was the last day the family had health insurance through his job.

In Nevada, about 206,000 casino workers have been affected by mandatory closings. As Brittany Bronson outlines in The New York Times, some large casinos are keeping their workers on the payroll, but many others aren’t as lucky. 

Without additional help from the federal government, it will take a stroke of good fortune for the average Nevadan to survive this crisis. I feel this quite acutely, having secured a new job outside the service industry just two months before the casinos closed.


Running out of food
The Greater Baton Rouge Food Bank is running low on food at the worst possible time. The Advocate’s Ellyn Couvillon reports that only three weeks of inventory remain as residents stock up on food and normal supply chains are disrupted. 

Major grocery stores and national food manufacturers provide much of the perishable and non-perishable food that stocks the nonprofit food bank’s 172,000-square-foot warehouse on South Choctaw Drive, (Food Bank President Mike) Manning said. … But all of that is threatened right now, with nationwide stockpiling at homes leaving not much extra for food banks, Manning said. 


“Wartime medicine” in Louisiana
Louisiana has quickly become a national epicenter of the coronavirus outbreak, putting unprecedented strain on local hospitals and doctors as they struggle to treat the influx of patients. The Advocate’s Andrea Gallo and Emily Woodruff report that it’s already led to difficult decisions about patient care, as providers begin rationing resources to ensure that they flow to the sickest patients. 

A new and mounting concern for many health care workers is the way in which the crisis is forcing them to carefully allocate their time, care and supplies. They’re adjusting to a new reality, a world in which it’s normal to use FaceTime to connect families when a patient starts to deteriorate, and when they must decide how much time they can afford to spend at one patient’s bedside before moving on.


Number of the Day
125 – Coronavirus deaths in New Orleans as of Thursday. (It rose to 161 by Sunday.) That exceeds the total number of homicide deaths in the city for all of 2019 (Source: | The Times-Picayune).