This week House Speaker Nancy Pelosi finally dropped her demand that Congress pass upwards of $1 trillion in funding for state and local aid. That decision opened the way for Congress to pass a much-needed COVID relief bill to help so many Americans suffering from the effects of the pandemic. The situation recalls Aesop’s timeless tale about the carefree grasshopper, who chirped and sang and frittered away the summer, while the ants toiled in the hot sun to prepare for the cold winter.
Asked last week how he planned to plug the $3.8 billion hole in the city’s budget, New York City Mayor Bill de Blasio demurred. He said he’s waiting on the results of the Georgia special election. If Democrats can run the table, the Mayor expects Democrats will use their power in Washington to deliver a massive rescue for cities like New York – namely, cities facing budget troubles that existed prior to the pandemic. The Mayor openly admitted that, “right now, we don’t have a way to close that gap without federal support.”
New York City is not alone in its need for federal aid. The State of New York faces its own deficit in the range of $8 billion. Illinois recently borrowed $2 billion to cover its shortfall, while Chicago forecasts a $1.2 billion gap. California needs something near $14 billion from the federal government to stay afloat. Some of these states’ shortfalls can be traced understandably to the shocks imposed by the pandemic. Indeed, Congress overwhelmingly approved $150 billion back in March to backfill these needs. But while Utah and many other states largely allowed small businesses and houses of worship to reopen, places like New York and California have kept many of them closed. That has predictably resulted in a drop in tax revenue.
At the same time, many Republicans in Congress, including Utah Sen. Mike Lee, have questioned whether COVID is truly the primary cause of the financial distress facing these Democratic-controlled places. Mayor de Blasio, for example, has added 30,000 new city employees and recently spearheaded creation of an expensive universal pre-K program. All told, he has increased the city’s budget by $20 billion. Even before the pandemic, the State of New York faced billions in spending deficits stemming from generous Medicaid benefits, school aid, and economic development programs. Chicago, New York, Philadelphia, Detroit, and Boston each face enormous unfunded pension liabilities and no clear way to pay for them.
Meanwhile, like the ant in Aesop’s tale, Utah and other fiscally responsible states have used savings set aside in prior years. The Utah Legislature just released the December 2020 Revenue Estimates, and it seems the state’s finances look relatively stable – even assuming no new money will be coming from Washington. Legislators could have implemented any number of budget-busting social programs over the years. But they made responsible choices that have allowed the state to weather this storm. Utahns sacrificed in the prosperous years to prepare for an emergency that arrived in 2020.
While the pandemic has created many shared responsibilities, the carried debts of other states should not be one of them. The ants did not save the grasshopper from his folly, and neither should Utah.
Corey Astill advises businesses on federal health care and retirement policy. He is a former senior advisor in the U.S. Senate and current co-host of the “Conservative Minds” podcast. He lives with his family in Lehi, Utah.