State of the states is dire

Views from around the world. These opinions are not necessarily shared by Stuff newspapers.

As negotiations over the next coronavirus relief package heat up, a key point of contention is whether Congress will provide meaningful aid to struggling state and local governments. Democratic lawmakers favour the move. Many Republicans, including Senate majority leader Mitch McConnell, do not. Denying states a financial lifeline, even as Washington is showering trillions of dollars on the private sector, will only exacerbate the economic devastation Congress is trying to mitigate.

The Center on Budget and Policy Priorities estimates states could suffer a collective shortfall of $500 billion through the 2022 fiscal year. Local, state and territorial governments face their own funding crunches. McConnell suggested that, rather than receiving additional aid, states should be allowed to declare bankruptcy. His office later touted his opposition to ‘‘Blue State Bailouts’’.

The idea of thrifty, self-sufficient red states propping up blue states has long been a Republican canard. Of the 20 states with the most favourable balance of payments, a handful, at most, are blue. For every dollar in federal taxes it pays, New York receives 91c in return. McConnell’s home state, Kentucky, by contrast, rakes in $2.41 for every tax dollar it pays.

Allowing state budgets to collapse is counterproductive. Democratic lawmakers need to hold the line in this round of relief negotiations.