Updated: September 07, 2020 09:49 AM
Created: September 07, 2020 09:47 AM
States across the country are faced with huge decisions amid a sharp drop in tax revenue caused by the pandemic.
It is causing major cuts to school aid, new taxes on cigarettes and legalized marijuana, as well as reducing pay for government workers.
As NewsChannel 13 previously reported, Congress has been deadlocked for a few months on a coronavirus relief package. Many states aren’t able to wait any longer to see if money will come in from the federal government, leading to drastic cuts or changes.
Congress did approve $150 billion for state and local governments in March, but that money was targeted to cover coronavirus related costs -- not to offset declining revenue due to the pandemic.
Some lawmakers are pushing for flexibility in how to use that money.
The Bipartisan National Governors Association and Moody’s Analytics have cited a need for $500 billion in state and local government aid to avoid major damage to the economy.
The cuts look different in each state.
In Wyoming, the cuts will reduce funding for childhood vaccinations and eliminate a program to help adults learn new job skills, among other things.
Governors in New Mexico and Pennsylvania are urging the lawmakers to legalize and tax recreational marijuana as a way to gain state revenue.
In New York, school districts are preparing for a 20% cut in aid. In the Capital Region, the Albany and Schenectady Central School District had to let hundreds of teachers go just a week before the start of school.
Gov. Cuomo estimates the state will have about $8 billion less in tax revenue than once expected this fiscal year. He wants to see Congress provide an additional $30 billion to New York to plug budget holes that will build up in coming years.
Cuomo says no combination of savings or taxes would ever come near covering this deficit. The state needs the federal government to close it.
Some New York lawmakers are calling for the governor to increase taxes on the wealthy in the state -- and they hope that will stop some of these cuts, including the ones to schools.
In May, the House voted to provide nearly $1 trillion of aid to states and local governments. However, that did not make it past the Senate and the president did not approve the bill.
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