Across the U.S., states could see a cumulative $424-billion deficit through 2022, according to Moody’s Analytics. The figure assumes there is no federal aid to states, that some degree of economic restrictions remain in force, and Medicaid expenses rise to cover the medical costs of people without jobs.
Connecticut’s quick, drastic economic shutdown this spring has left the state with an $8.4-billion revenue shortfall through 2024, more than twice as much as it has in its rainy-day fund.
It expects revenue collections to shrink by $5 billion this year, down 13 percent from its pre-COVID projections.
To plug the hole, the state has slashed $1 billion from its budget, raised taxes on people making $1 million to $5 million a year, and plans to borrow up to $10 billion.
New York State is staring at a $59-billion budget gap through 2022; the state has responded by cutting its education budget by at least 8 percent.
Missouri has promised cuts to services for the elderly, among other programs.
Crashing oil prices have decimated state revenues in Alaska, Louisiana, and Texas; the disappearance of tourists from Florida, Hawaii, and Nevada has done the same in those states. Shuttered casinos have impoverished Illinois, New York, and Rhode Island.
Illinois, already in a worse financial condition than most states, is sitting on $8 billion in unpaid bills and faces a $230-billion unfunded pension liability after years of deferring payments.
From February through September, state government payrolls tossed 5 percent of their workers, leaving a total of about 4.9 million employees, a number smaller than before the Great Recession.
For the three budget years 2020 through 2022, the collective revenue of all 50 states will not reach 2019’s total, Moody’s said.
“There is no model for a crisis like this,” New Jersey state treasurer Elizabeth Maher Muoio said to the Wall Street Journal. “It’s going to be tough for the next couple of years.”
TREND FORECAST: As we have forecast, with tax revenues continuing to decline, states and cities across the nation will go deeper in debt. The numerous financial schemes undreamed-of to keep them from going bankrupt will prove unsustainable.
And, as we have forecast, to raise more money, politicians will increase taxes. Thus, anti-tax, anti-vax, and anti-establishment will be new platforms for new third-party movements.
It should also be noted that when politicians launched the COVID War, as we had said, just as they start murderous wars that cost trillions and kill millions with no exit strategy, so, too, with the COVID War. Governments have mandated draconian lockdown rules without ever mentioning the economic and psychological toll it would take on humanity.
Long forgotten by the Presstitutes who put out for him and his loyal followers, was New York Governor Andrew Cuomo’s 6 June forecast that his lockdowns did not create economic hardship: “You want to talk about a turnaround – this one, my friends, is going to go in the history books.”
