States are facing severe fiscal pressures stemming from the unprecedented self-imposed economic freeze, with many quickly depleting rainy day funds. To help states and municipalities avoid the immediate consequences of the plunge in tax revenue, the Federal Reserve is purchasing massive amounts of state and local debt. The federal government has stepped in to help with the jump in state health care spending. Now, some state politicians are warning of steep budget cuts without a massive federal government bailout. Left unsaid is that even a 10 percent cut in state government budgets would leave many with higher inflation-adjusted, per capita spending than before the last recession. Join us as our experts examine the situation facing the states, the problem of local government insolvency, and the repercussions of increased involvement by the federal government and the Federal Reserve.

Heritage convened the National Coronavirus Recovery Commission to make recommendations for state and local governments, the Trump administration, Congress, and the private sector. Learn more at CoronavirusCommission.com.

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