Reporters from four of POLITICO’s state bureaus on Thursday held the latest in a series of subscriber-only conference calls to discuss the coronavirus pandemic.
POLITICO New Jersey’s Ryan Hutchins, POLITICO New York’s Anna Gronewold, POLITICO Florida’s Matt Dixon and POLITICO California’s Jeremy White discussed mounting job losses, regional coordination around relaxing stay-at-home orders, states’ fiscal positions and more.
Here are three main takeaways from the April 23rd briefing:
Amid mounting pressure from the White House and conservative protesters to relax stay-at-home orders shuttering the American economy, governors have formed regional coalitions to coordinate reopening. In the Northeast, the governors of Massachusetts, New York, New Jersey, Connecticut, Pennsylvania, Delaware and Rhode Island have formed a working group made up of one public health official, an economic development official and the governor’s chief of staff from each state.
Despite the announced coordination, it’s unclear what their recommendations will be — and differences remain in the way those states’ executives have approached reopening, Anna notes. Massachusetts Gov. Charlie Baker, for instance, has announced his state will not open up schools again this school year — a move Cuomo has not yet done in New York.
On the West Coast, California Gov. Gavin Newsom, Oregon Gov. Kate Brown and Washington Gov. Jay Inslee have formed a pact of their own. Newsom this week, for instance, appeared to coordinate with his fellow governors on lifting restrictions for hospitals to perform elective surgeries. In both cases, Anna and Jeremy note, the coalitions appear in part aimed at signaling to the federal government the frustration governors have with the lack of a unified federal approach and an assertion that the ultimate decision on reopening their states’ economies falls with them.
In the Southeast, the situation is different. Gov. Ron DeSantis of Florida — a close ally of President Donald Trump — took to “Fox and Friends” earlier this week to announce he was partnering with the governors of South Carolina, Georgia, Tennessee, Mississippi and Alabama. While the group of governors is united by an instinct to reopen their states’ economies, Matt notes from Tallahassee, the loosely aligned group seems to have less of a defined plan than the other two regional pacts. This is at least partly due to differences in geography: Florida’s border with neighboring states is the least populous and least hard-hit portion of the Sunshine State.
Another 4.4 million Americans filed for unemployment benefits last week, bringing the five-week total of coronavirus-driven job losses to more than 26 million — including more than 1.7 million Floridians and 3 million Californians. State estimates in California say between 12 and 15 percent of the state’s working population has lost their jobs thus far, Jeremy notes. In the past week, more than 140,000 New Jerseyans and 204,000 New Yorkers filed for unemployment.
State governments across the country are buckling under the weight of the crush of unemployment claims. In New York, Gov. Andrew Cuomo has made improving the antiquated online system for filing unemployment claims a major priority. The state has partnered with Google to create a new, streamlined application and added thousands of staff to call centers.
On Thursday, the U.S. House of Representatives passed a $484 billion stimulus bill aimed at delivering emergency aid to small businesses and hospitals. The Senate passed the measure Tuesday, and Trump is expected to sign the bill into law. The passage follows two weeks of often-tense negotiations between congressional Republicans and Democrats, who had been pushing for additional relief for state and local governments, which did not ultimately make it into the bill.
With states facing dire revenue shortfalls, governors across the country are pushing for additional relief in a potential fourth economic stimulus bill. Trump, in a White House meeting with Cuomo earlier this week, signaled he was open to the idea, but Senate Majority Leader Mitch McConnell has instead suggested states should “use the bankruptcy route” rather than receive further aid from the federal government — an assertion that was panned by Cuomo and New Jersey Gov. Phil Murphy.
With aid from Congress uncertain, states are facing widely different fiscal situations. In Florida, tourism and hospitality are major economic drivers and are facing some of the most dire economic hits from the pandemic. “Those fruity coconut rum drinks drive our economy, and right now, none are being poured,” Matt said on the call. The state, though, does have a $4 billion rainy day fund that DeSantis and the Legislature expect, together with what federal aid they’ve received, to get them through the end of the fiscal year in July, Matt adds.
The New Jersey Legislature has punted the budget decision to September, Ryan notes, hoping lawmakers will have a better idea of the economic toll of the coronavirus then. The state’s rainy day fund was depleted under Murphy’s predecessor, Republican Gov. Chris Christie, and its surplus kept low. Murphy has built the New Jersey’s reserves back up, but not nearly to the levels maintained by some other states.
New York, similarly, has a rainy day fund that is insufficient to weather a major economic storm, Anna notes. The New York state Legislature passed a budget that gives the state flexibility to trigger revenue cuts depending on its financial position. Absent additional aid from Congress, Cuomo has suggested schools and localities could face up to 20 percent budget cuts.
California has a $17.5 billion rainy day fund, but the state Department of Finance projected the coronavirus pandemic could cost the state $35 billion in next year. Cities, too, are hurting across the state. Los Angeles Mayor Eric Garcetti announced furloughs for city employees and referred to his upcoming budget as “a document of pain.”
Facing deep and wide-ranging hits to state coffers, liberal governors like Newsom and Murphy have been unusually careful not to pick fights with Trump, and have even at times praised the president’s pandemic response, Jeremy notes. There’s recognition the states need all the help they can get from Washington.