I was struck by today's Governing.com opinion piece by the eminent LBJ School scholar Prof. Donald Kettl "The Federalism Partnership That Is No More" He may be overstating the case a tad, but given the current Senate/White House/House gridlock - and FRB unwillingness to go further than its lame 'Municipal Liquidity Facility' - it's clear that the "Federalism Partnership" will take a lot of thoughtful reconstruction through bi-partisan work on initiatives like the SMART Act by Menendez, Cassidy, et al in the Senate and Sherrill,King, et al in the House.
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In most of these postings, I've focused on the State and Local fiscal disaster as if it is one revenue shortfall phenomenon. But of course the state and local government sector is not some kind of monolithic entity. So it's also useful to look at the local government revenue disaster on its own, if for no other reason than local government has traditionally had to rely on property tax revenue while states don't. A timely piece by Forbes contributor Liz Farmer published 8/16 puts the current - and to some very surprising - drop in property tax revenue being experienced by cities, counties , etc. during the current Greater Recession under a useful magnifying glass in "No Foreclosure Crisis In Sight But Property Tax Revenues Still Falling."
Also, An excellent summary of how the tsunami of revenue short-falls is going to be impacting 150 larger cities by reporters Emily Badger & Quoctrung Bui was just published with great and profoundly disturbing graphics like the one above by the NY Times: "The Recession Is About to Slam Cities. Not Just the Blue-State Ones" (8/17/20).The Times piece is based on a forthcoming paper "The Fiscal Effects of The Covid-19 Pandemic on Cities: An Initial Assessment," to be published in National Tax Journal by Howard Chernick, David Copeland and Andrew Reschovsky," now available in its complete form here:
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