The COVID-19 recession threw millions of Americans out of work and closed businesses, suppressing spending and use of services that help pump tax revenue into state and local government coffers.
That, in turn, has left yawning holes in budgets spent educating students, policing communities, providing health care, building and maintaining roads and parks, and serving a host of other functions.
The federal government allocated huge pots of money for states, school districts and local governments in March to deal with the pandemic, and that has helped them weather the public health crisis.
However, the federal funding had a catch: It couldn’t be used to fill holes in state budgets for nonpandemic-related expenses.
Nationally, about 1.5 million college, school and other government workers were laid off or furloughed during the early months of the COVID-19 recession, eclipsing the declines during the Great Recession, according to U.S. Department of Labor figures.
During a video “town hall meeting” put on by the National Conference of State Legislatures, England said Georgia lawmakers were able to avert major job cuts or furloughs during the General Assembly session that ended in June.
Lawmakers cut $2.2 billion in spending — including $950 million from basic school aid — but avoided wide-scale layoffs and furloughs that agencies had originally recommended.
England said lawmakers stopped “just shy of the point where it gets into the livelihood of state employees.”
If lawmakers have to do more spending cuts later this year or early in 2021, that may not be the case.
Georgia Health News reported Tuesday that the state’s mental health agency, the Department of Behavioral Health and Developmental Disabilities, laid off or was in the process of laying off 200 employees, including positions in each of the state-run hospitals, regional field offices and central office.
England said Georgia’s state government is currently operating with more than 15,000 fewer employees than it was before the Great Recession hit in 2008.
In his letter to Perdue and Loeffler, Ralston said the revenue picture is “mirroring” the trajectory of the Great Recession, when the state ran though a $1.5 billion reserve quickly, furloughed thousands of state employees and cut k-12 school funding.
“Georgia’s economy is typically a strong network of diverse revenue streams, but the pandemic has affected all of them, even those like motor fuel that typically tend to resist downturns,” Ralston wrote. “The lagging effect on our largest revenue sources, income and sales taxes, is presenting us with additional challenges for months to come.”