America’s cities and states face a cash crunch

NO COUNTY IN New York, outside the city and Long Island, has seen more cases of covid-19 than Westchester, just north of the Bronx. For weeks tens of thousands of would-be commuters have been staying home. Bars, restaurants and other businesses have been closed.

Sales-tax revenue, usually around $500m, may be down by as much as $100m this year. With fewer people travelling, hotel-tax receipts will be lower. Meanwhile, spending on emergency and health services has soared. The county may face a shortfall of up to $160m on a $2.1bn annual budget. It can hope for at best limited help from the state of New York, which itself expects a 14% decline in revenue, due to lower corporate- and personal-income-tax receipts, requiring $7.3bn in spending cuts in the next budget. “We’ve done a variety of projections,” explains George Latimer, the county executive: “Bad, worse, even worse and totally horrible.”

Mr Latimer is not alone. Shortfalls have hit local governments...

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