States brace for massive budget gaps in coronavirus recession
State governments have spent a decade stockpiling billions of dollars in reserve funds for the next economic downturn, scarred by the steep cuts they were forced to make in the midst of the last recession.
Now, with the coronavirus grinding the global economy to a virtual halt, those billions could be gone in a matter of months.
New York
A preliminary property tax plan in New York would hit Manhattan penthouse owners hard but really sock it to Brooklyn homeowners , according to a new analysis from The Wall Street Journal. In all, the WSJ found that the proposals hashed out by a commission launched by Mayor Bill de Blasio would raise more than an extra billion dollars of revenue, though not even two-thirds of homeowners would be likely to owe more. Just Brooklyn homeowners themselves, four out of five which would see property tax increases, are projected to contribute an extra $953 million under the commission’s plan. (Keep in mind: That all means de Blasio, who owns not one but two houses in Park Slope, might be among those knocked the hardest.) And the winner among the five boroughs? Staten Island, where three out of four property owners would see a property tax cut.
Ohio
Ohio’s budget director is already talking about the spending cuts the state will have to make in the months to come because of the declining tax revenues caused by the coronavirus, The Columbus Dispatch reported. Gov. Mike DeWine has floated the idea of a 20 percent drop in spending, but his budget director, Kimberly Murnieks, says that might just be a starting point. Part of the uncertainty stems from the fact that it’s not clear just how far the bottom will drop out of the state’s revenue base. February revenues in Ohio were a touch above projections, and the state was collecting close to a half-billion dollars more this fiscal year than last. But now, it will likely take April numbers to get a better sense of how deep the hole is.
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