Up to now, the focus on the pandemic has been on the health care side of the equation. Last week, the Joint Appropriations Committee of the General Assembly met (virtually) to discuss what it has cost us.
The economic fallout is even worse than the recession of 2009. New unemployment numbers are worse than during the Great Depression. Georgia’s revenue for April was down 36% – a stunning $1 billion loss from last year… in one month alone. The May numbers will be even lower. Overall, Georgia expects a 15% tax shortfall or $3.8 billion for the year. Even more shocking, a third of all previously employed Georgians have filed for unemployment.
Yes … you read that right. A third of all Georgians are now out of work. This, after posting the lowest unemployment numbers in history just a few months ago.
Thankfully, the state’s previous conservative fiscal policy has built a healthy rainy-day reserve balance of $2.7 billion. But even if we drained that entire account, it would still not balance our budget. Such a move would also cause us to lose our AAA bond rating, which will make borrowing money to overcome short-term short falls vastly more expensive.
Thus, Gov. Kemp has instructed every state agency to reduce their budget by 14 percent for fiscal year 2021. That is on top of the 4% we already took for fiscal year 2020. Since 90% of the state budget is tied up in 11 large budget areas, that is where 90% of the cuts will have to come from. Education will probably lose about $1.5 billion, community health — $500 million, our universities — $361 million, transportation — $280 million, corrections $170 — million, student finance $141 — million, Human Services — $116 million, Early Care and Learning — $61 million, and our technical colleges — $52 million. Another $333 million will have to come from the remaining 38 agencies. The governor has said there will be no exceptions.
Obviously, this crisis is much different than the recession of 2009, because the problem was not caused by a weak economy, but rather a foreign virus. Tens of millions of lives are being shattered, and a grim new study predicts that half of all small businesses will be permanently shuttered. We’re hoping when we start up the economy again, the recovery will be robust. But that depends on consumer confidence, which doesn’t look promising. Seventy-five percent of Georgians fear to go to a mall, 60% won’t go into a restaurant, 68% don’t want to go on a vacation, and 53% of us don’t want to go shopping. Until we can regain our confidence and get out and safely engage in business, we will continue to face further hardships.
I believe it’s time to get back to work. The majority of states have begun that process, and many states never shut down in the first place. Following the science, the numbers in the states that were never closed are no worse off than the ones who did. And it must be noted that no governor is mandating that businesses must open; rather, they are giving their citizens the freedom to open … if they so choose.
Freedom is a word we haven’t heard a lot these days. What we have heard is the need to flatten the curve to keep hospital beds open. Well, the curve has been flattened – way down from that fearful “2.2 million deaths” model the media hyped so much. It is inevitable that we will continue to get new cases, but as of Monday the number of hospitalizations and people on ventilators is decreasing in Georgia. And despite all their dire predictions, no one in this nation who needed a ventilator or a hospital bed didn’t get one. In fact, hospitals across the nation are actually furloughing nurses and doctors – close to a million in America – in the middle of a pandemic – because no one will go there for fear of contracting this virus.
Poverty is deadlier than any virus. Poverty leads to hunger, want, homelessness, alcoholism, domestic abuse, suicides, and an array of heartbreaking circumstances that no government – no matter how much money they print – can fix.
The truth is that everyone accepts a certain level of risk every time we walk outside our door … and we always will. Shutting ourselves in indefinitely is a false choice.
Of course, we need to take protective measures to keep ourselves safe. Of course, we need a lot more testing. Gov. Kemp recently urged all Georgians to schedule a coronavirus screening, regardless of whether they have symptoms. Of course, the elderly and people with chronic conditions need to remain safely quarantined. Of course, no business should be forced to re-open. But my hope is that healthy Americans will exercise their freedom to safely go back to work and return to their favorite restaurants and businesses. The consequences if we do not restart our economy will be misery and strife on a scale hitherto unimaginable.