State and local governments will be facing a major reckoning after shutting down their own economies in order to “battle” the Wuhan Coronavirus. State government budgets were already teetering on fiscal insanity under faulty accounting gimmicks. Now that they shut off their tax revenue, they must start cutting.
Pennsylvania has started doing just that.
Gov. Tom Wolf’s administration on Friday told nearly 9,000 state employees — more than 10% of the workforce — that it will stop paying them by the end of next week in order to reduce spending as the coronavirus shutdown continues to batter the economy.
The affected employees have jobs that cannot be completed through teleworking, according to the administration, which began shuttering state offices in mid-March to reduce the risk of spreading the virus. Starting April 11, those workers will have to use vacation, sick, or other personal leave time if they want to continue receiving paychecks. Otherwise, they can file for unemployment.
More than half of the 9,000 affected employees — or about 5,700 people — work for the Department of Transportation, according to the administration. Also, 908 are employed with the Department of Labor and Industry, and an additional 849 are with the Department of Revenue. State officials said essential jobs in those agencies, which have performed critical tasks during the pandemic, will not be affected.
The remainder of the affected employees work in departments spread across the government.
The shutdown order has already dealt a significant blow to the state budget, and the worst is yet to come. This week, state officials reported that tax revenues fell 6% short of expected collections in March, wiping out a surplus amassed during the current fiscal year. The lion’s share of Pennsylvania’s annual revenue comes from the sales and personal income taxes, both of which are expected to fall well below estimates in coming months.
Source: The Philadelphia Inquirer