The Coming State and Local Austerity? A 2nd Roundup of Recent Reporting

Click here to see our first roundup on state & local austerity.

Spending Cuts

State

Michigan: On March 30th,“While signing the supplemental spending plan, Whitmer also vetoed nearly $80 million in other spending, like Pure Michigan, Going Pro and MI Reconnect. ‘The supplemental was negotiated in good faith with my administration and the legislative leaders. Key priorities from both sides were included in the bill,’ Whitmer said. ‘But the world has changed since those negotiations and we must react and change along with it.’”

Missouri: On April 1st, “All told, reductions to the budget for the fiscal year that ends June 30 are around $180 million. Parson could restore the cuts if revenue becomes available.”

New York: On April 1st, “New York state lawmakers reached a tentative state budget agreement that reduces operating spending by roughly $10 billion, an adjustment caused by the economic toll of the state’s novel coronavirus crisis. The agreement would allow aides to Gov. Andrew Cuomo to make further cuts over the course of the fiscal year if revenues don’t materialize, the Democratic governor said Wednesday.”

Hiring Freezes

State

Michigan: On March 30th,“Whitmer froze state hiring and discretionary spending across different state agencies. Weiss said it’s unclear how the $2 trillion federal stimulus package will help Michigan’s bottom line.”

New Hampshire: On April 1st, “‘Our budget director and our team are kind of reviewing those numbers and working with department heads,’ Sununu said. ‘We’ve already put in place the idea that there are a large variety of positions in our state that are not filled right now that in act we have frozen.’ Freezing the jobs will allow state officials to take a closer look at the ‘areas of most need,’ Sununu said.

Local

Fairfax County, VA: “Those bigger ticket line items facing cuts compared to the budget proposal introduced just over a month ago are in addition to other more immediate changes, such as a general county hiring freeze and a hold on noncritical spending.”

Akron, OH: “Akron Mayor Dan Horrigan on Tuesday [March 31st] announced a series of additional measures the city is taking to deal with the COVID-19 coronavirus crisis, including the formation of a task force to review the city’s budget, a hiring freeze and changes to curbside trash service.”

Michigan City, IN: “Mayor Duane Parry issued an executive order Friday [March 27th] mandating a hiring freeze and other cost-saving measures to combat the financial hardships caused by the COVID-19 pandemic.”

Santa Maria, CA: On March 31st, “Santa Maria officials have implemented a job freeze across all city departments and furloughed 90 hourly limited-service employees, as they brace themselves for significant budget cuts following decreased revenue from the coronavirus pandemic.”

Wichita, KS: “The city of Wichita sent an email to its employees Friday (March 28th) notifying them of a hiring freeze and a “temporary furlough for a limited number of full-time and part-time city positions that are unable to perform work remotely” during the new coronavirus pandemic.

Layoffs/Furloughs

State

Pennsylvania: On March 30th, “Approximately 2,500 state employees have been let go or placed under leave without pay status.”

Local

Cincinnati, OH: “Mayor John Cranley, in an emotional press conference Monday [March 30th] where he tried, but couldn’t hold back tears, announced the city will furlough 1,700 workers.”

Santa Barbara, CA: “On Saturday [March 28th], Mayor Cathy Murillo said about 400 city workers will be let go during this crisis.”

Ledyard, CT: On March 30th, “Dorman said the Board of Education initially laid off six 10-month secretaries a couple of weeks ago and that over the past weekend, the union learned the town had delivered layoff notices to four health aides who work in the schools and five library workers. All of the layoffs come as the town downsizes due to the coronavirus pandemic, Dorman said.”

Akron, OH: “Due to concerns of the COVID-19 coronavirus, Akron Mayor Dan Horrigan announced Tuesday (March 17) that all non-essential city employees are directed to not report to work starting Friday. The city’s approximately 1,800 workers will be notified Wednesday about whether they are an essential employee or one of about 600 non-essential employees.

Wichita, KS: On April 2nd, “The City of Wichita furloughs more than 300 of its workers in response to the coronavirus pandemic.”

Coming Budget Crunch

State

Alaska: “The Alaska Legislative Finance Division estimates that the drop in oil prices could drive a $400 million revenue reduction for the current fiscal year, according to analyst Alexei Painter. The lower oil prices, paired with less activity from tourism and fisheries, could help drive an $800 million revenue reduction in fiscal 2021, Painter said.”

California: “California is already dipping into reserves and has warned state agencies not to expect full funding next year.”

Michigan: On March 30th,“‘At this point, we are looking at a wide range of scenarios that could translate to $1 billion to $3 billion in lost revenue,’ Kurt Weiss, spokesperson for the budget office, said via email.”

New Hampshire: “There will ‘undoubtedly’ be state budget cuts due to the effects of the coronavirus pandemic, Gov. Chris Sununu said Wednesday [April 1st].”

Kentucky: On March 25th, “Lawmakers might have to revisit this budget, either in a special session or in next winter’s regular session, when more accurate revenue data comes in, he said. Those most pessimistic numbers would be $115.7 million less than the current House budget bill in the first year and $174.7 million less in the second year, he said.”

New Mexico: On March 31st, “A key New Mexico lawmaker on budgetary matters said state revenue could fall short of projections by $1.5 billion to $2 billion amid the COVID-19 pandemic and low oil prices — a bigger hole than legislators anticipated just two weeks ago.”

Local

Steamboat Springs & Routt County, CO: “Early calculations show the city’s general fund losing between $3.5 million to $4.5 million due to the novel coronavirus and subsequent lost sale tax revenue, City Manager Gary Suiter said in a report during a Steamboat Springs City Council meeting Tuesday [March 31st].”

Santa Barbara, CA: On March 31st, “Mayor Murillo said The City of Santa Barbara has three revenue sources: property taxes, sales taxes and hotel bed taxes. Two of those taxes have nearly halted, sales and hotel bed taxes.”

Akron, OH: On March 31st, “Horrigan has also directed the task force and some of the city’s economists to analyze the potential economic impacts of the pandemic, and to create a series of projections for budget reductions, ranging between 5% and 20%.”

Baltimore, MD: “Baltimore’s revenue is expected to decline $68.7 million in the current fiscal year, which ends June 30, and the city is forecasting revenue will decline by $103 million in the next fiscal year due to the coronavirus’ crippling effect on the local economy.”

San Francisco, CA: “A new report released Tuesday [March 31st] by San Francisco city leaders projected the city’s budget deficit for the upcoming two-year budget could increase to more than $1 billion as a result of the novel coronavirus.”

Hoboken, NJ: “After fee-based revenue started drying up and overtime expenses rose, the city scrapped its drafted budget, which was already tackling a budget deficit worth up to $15 million. […] Councilwoman Tiffanie Fisher, who co-chairs the City Council’s finance subcommittee, said the lost revenue from parking, construction permits and court fees alone could add up to $3 to $5 million to the deficit.”

New Orleans, LA: “Mayor LaToya Cantrell painted a dire picture of the city’s financial situation during an interview on WBOK Radio Monday, saying the lack of income from taxes could cut $100 million from the city’s operating budget. ‘We are anticipating a budget deficit upwards of $100 million for 2020,’ she said.

Cincinnati, OH: On March 30th, “Cincinnati estimates a $27.5 million deficit for FY2020, which only has three months left, while it faces up to an $80 million deficit in FY2021. Those figures assume that the economy begins to return to normal in June. The city also will face millions of dollars in additional monthly expenses related to the Covid-19 response.”

For additional state budget info, see this great rundown from CBPP.

Brian Nichols specializes in research, policy, and strategy focusing on American politics and government.