COVID-19 pandemic wrecks many state budgets, could trigger deep cuts



As the nation enters a third month of economic devastation, the coronavirus is proving ruinous to state budgets, forcing many governments to consider deep cuts to schools, universities, health care and other basic functions that would have been unthinkable just a few months ago.

Many states expect their revenue to plunge by 15% to 20% because government-ordered lockdowns have wiped out much of the economy and caused tax collections to evaporate. That puts statehouses billions of dollars in the red for the fiscal year that usually begins in July, with no end to the crisis in sight.

Colorado faces a gap of nearly a quarter of the state's general budget. The projected gap in California is more than a fifth of its spending plan and in Oklahoma, a sixth. The governor of Oregon is preparing to cut 17% of her budget. Michigan may have to slash up to a quarter of the money it sends to schools.

"There's no crisis we've had that even comes close to this," said Greg Albrecht, chief economist for the Louisiana Legislature. "This is a (Hurricane) Katrina-sized downgrade in the forecast." A forecasting panel slashed the state's income projections by $1 billion because of the virus.

The drumbeat of bad news continued Wednesday as Washington's governor froze most state hiring and called for 15% cuts to many parts of the budget. New Jersey announced that tax revenue for April was down 60% compared with the year before — and that it will look worse next month.

The dire projections are coming out as Congress gets ready to debate whether and how to help.

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