What State and Local Governments Can Learn from the Coronavirus Crisis

Why should the responsible states bail out the irresponsible ones?

by Veronique de Rugy

There’s no doubt that this pandemic-induced recession is hitting states hard. But that’s no reason to bail them out, especially when many failed to prepare for emergencies, which are inevitable.

States today are dealing with a huge mess because of a sudden and steep reduction in their revenues while their pandemic spending is going up. But lost in the lamenting about the states’ misfortunes is the fact that politicians in these states spent the last decade bloating their budgets rather that cutting spending to be better prepared for crises.

Stories abound about the sorry condition of state and local government finances. A recent report in The Wall Street Journal explains, “State and local governments from Georgia to California are cutting money for schools, universities and other services as the coronavirus-induced recession wreaks havoc on their finances,” and, “Governments have cut 1.5 million jobs since March, mostly in education, and more reductions are likely barring a quick economic recovery.”

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