A debate over federal dollars for cities and states badly harmed by the pandemic begins with the words we use. For some, the distribution of federal funds implies that poorly run cities and states are pushing for a bailout. For others aid to badly hurt urban centers and states that took the brunt of the pandemic in the early chaotic months is a necessary relief effort for our fellow countrymen.
Unfortunately the debate often gets tied up in red and blue politics.
Back in May, the Wall Street Journal editorial page (May 17), known for its conservative leaning, took the point of view that well managed states, with Florida as the example, should not have to tax their citizens to “bailout” poorly managed states, with New York as an example. The argument has compelling aspects to it.
New York, with a state population that is largely stagnant over the last 10 years, is spending at a per person rate that dwarfs that of Florida. New York’s citizens are more heavily taxed than Florida’s. The populations are of similar size, with Florida actually about 2 million greater. Yet, as the Journal emphatically notes, New York has a growing deficit and Florida a surplus.
The Journal’s focus is on an Albany culture that spends on generous benefits with loose eligibility standards. The result, the Journal maintains, is a waste of taxpayer dollars. The purpose of the Journal editorial is not to provide a deep dive into New York’s fiscal management, as much as to set the stage for the real issue in the editorial.
Why should Florida’s citizens be asked, indirectly through federal spending, to pay for New York’s mishandling of its revenues by supporting a federal bailout of the Empire State now that the coronavirus has laid bare structural problems that existed before the virus arrived?
The Journal editorial dismisses with little comment the strong argument that states like New York and New Jersey pay billions more in taxes to the federal government than they see in federal spending in their states. By one analysis, New York State received about $0.90 for every dollar send to Washington while Florida receives $1.23, and Kentucky manages $2.00 of in-state federal spending for every $1.00 sent to Washington.
The arguments can be made for each side. The question is, are they the right arguments?
For the Journal it is the Aesop’s fable of the ant and the grasshopper. The grasshopper who has spent the summer failing to prepare for the coming burdens of winter, now begs sustenance from the industrious ant and is refused. The moral lesson is about the virtues of hard work and planning for the future.
Lacking confidence that all readers will grasp the story’s intent, some versions of the fable explicitly state a moral at the end. In the words of one such ending statement, “July is followed by December.”
What seems like a simple statement of the virtues of hard work and thrift can also be seen by others as mean spirited. New York took the brunt of the pandemic in the early months when the medical community had no idea how to fight it. The state was for a long time the epicenter of the disease with overwhelmed medical facilities and terrifying death tolls.
None of that derived from the practice of politics in Albany. Much of it stemmed from a novel virus that took advantage of urban settings to spread rapidly. For some the refusal to aid cities and states with federal dollars, essentially spreading the burden of the pandemic across the country’s population instead of localizing it in areas better or worse able to bear its burden, is mean spirited, a misapplication of the emphasis on personal responsibility in the face of a once in a century health emergency.
Supporters of federal assistance will see a refusal not as a moral awakening but as an example of a cold disregard for the welfare of fellow countrymen in the face of a disaster.
Yes, the federal government, and by extension the country’s taxpayers, should not bear the burden of lax measures that allowed public pensions to grow beyond the ability of a state’s tax base to support. Yet, the fact that a disaster unlike most others has crippled states and urban areas that are home to our countrymen.
We need to find a way to provide needed help at a level that meets the level of pandemic caused disruption without going so far as to “bailout” the problems inflicted by poor management of state resources. It will not be easy to find that middle ground, but it is necessary that we try.
Our response now to this pandemic and the devastating harm it has done may define our politics for a very long time. The moral taken from this tale may not be the one intended by Aesop.
Each of us must ask ourselves if this is the time to emphasize the differences in our approaches to fiscal management, or is it the time not to do so. It may be the time to provide the necessary helping hand that stops short of absolution for past error.
The citizens of each state must evaluate the readiness of their state for the financial calamity many of them now face. That does not provide a justification for doing nothing in the face of a global disaster that challenges us as a country to provide appropriate aid to our fellow Americans.