Federal Reserve Says RI Faces $400-$460M Shortfall, Means “Armageddon” Without Federal Relief
Sunday, April 26, 2020
The Federal Reserve Bank of Boston paints a bleak picture of Rhode Island’s economic condition and future.
According to the report, “Economic Fallout of the COVID-19 Pandemic in New England,” Rhode Island is set for massive budget shortfalls and the highest unemployment filings in the United State.
The report finds, “New England average unemployment insurance (UI) claims as a share of the labor force were higher than the US average. RI had the highest share of any state [in the United States], and MA the seventh highest."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe Fed report finds that Rhode Island faces massive budget shortfall — estimated to be $400 to $460 million.
“Factors driving a reduction in economic activity will result in draconian declines in state and local revenues. If the $400-460 million revenue shortfall the Boston Fed is projecting this year for Rhode Island materializes it could resemble a financial Armageddon,” says former Rhode Island Director of Administration Gary Sasse.
“This could possibly jeopardize the successful reopening of the entire Rhode Island economy. Business depends on essential public services to function successfully. If nothing else the pandemic should have reminded all Rhode Islanders about the critical importance of state and local services in their lives,” added Sasse.
The Fed identifies a range of critical financial challenges facing New England, “The total projected value of missed mortgage and rent payments is more than $1.5 billion every month in New England alone before considering UI expansion and direct payments in the federal CARES Act.”
As the states face massive shortfalls, U.S. Senate Majority Mitch McConnell has said he is opposed to the federal government bailing out the states.
On Thursday, Governors from around the country reacted strongly to McConnell. “This is really one of the dumb ideas of all time,” New York Gov. Andrew M. Cuomo (D) said during a briefing in Albany in which he warned that bankruptcy declarations by multiple states would lead to “a collapse of this national economy.”
"Addressing a revenue crisis of this magnitude requires that Congress financially intervene by making funds available so states and municipalities do not have to eliminate essential healthcare, public safety, education and transportation services individuals and business depend upon. The excuse some are making in Congress is that the federal assistance would be used to bail out states' past mistakes is irresponsible and laughable," said Sasse.
Additional reports findings by the Fed:
- estimates that 36 percent of renters and 18 percent of homeowners in New England are at risk of not being able to make their housing payment; an estimated $1.5 billion in monthly payments are at risk.
- state revenues across New England are expected to decline dramatically for FY 2020 and even possibly for FY 2021; in MA they are forecast to decline $3.3 billion to $3.9 billion between FY 2019 and FY2020, depending on how high unemployment rises.
- ultimately, the depth of the downturn and the restoration of economic activity will depend on how quickly the spread of the virus can be halted.
Related Articles
- Latest From Italy: Exercising - and Fines - During Coronavirus
- NEW: RI GOP Says Raimondo “Wasting Money and Losing Credibility” During Coronavirus Crisis
- RI Coronavirus Cases Now Exceed 5,000 - See Raimondo’s Briefing
- Tobin Questions Need for Daily Coronavirus Briefings - Asks If They Are Just “Political Theater”
- “Knock It Off” Protest Organized Against Raimondo’s Coronavirus Policies, Facebook Sets Restrictions
- NEW: Pence and Raimondo at Odds Over Coronavirus Peak in RI
- 7 Major Coronavirus Developments — RI Minorities Suffer 60% of All Coronavirus Cases — April 20
- NEW: 19 New Coronavirus Deaths in RI for 137 Total - Watch Saturday 1 PM Briefing Here
- Coronavirus Will Fade; Life-Changes Will Not – “The Sunday Political Brunch” April 19, 2020
- 7 Major Coronavirus Developments — Raimondo’s Confusing Mask Order — April 19, 2020
- NEW: 13 More Coronavirus Deaths in RI Reported for 150 Fatalities Total - Watch Sunday 1 PM Briefing
- WATCH LIVE: Raimondo’s 1 PM Coronavirus Briefing
- 7 Major Coronavirus Developments — RI Company Tagged As “Shyster” by CBS — April 21, 2020
- 7 Major Coronavirus Developments — 50% More Nursing Homes With Virus Than Previously Disclosed
- NEW: Coronavirus Cases Jump 412 in One Day in RI, 8 More Fatalities
- EXCLUSIVE: Rhode Island’s First Nursing Home Files for Receivership Due to Coronavirus
- 7 Major Coronavirus Developments — RI to Move Forward with Antibody Testing — April 25, 2020
- 430 More Coronavirus Cases in RI, 77 Currently in ICU - Watch Sat. 1 PM Briefing
- 45% of RIers Say Little Impact By Coronavirus, Raimondo Higher Rated Than Trump, Says New Poll
- 7 Major Coronavirus Developments — Raimondo Admin to Reverse on Nursing Home Disclosures — April 23
- RI Announces Highest Number of Coronavirus Cases in One Day - MA Gov Baker Closes Schools for Year
- 7 Major Coronavirus Developments — 2nd Wave Concerns, Oktoberfest Canceled — April 22, 2020
- Lifespan Devastated by Coronavirus — Loses $75.7M in March, Nurses Committed to Difficult Work
- New Coronavirus Modeling Predicts June 7 for When RI Can “Relax Social Distancing”
- NEW: Raimondo Taps Shepard Fairey to “Lift Spirit” of Rhode Islanders During Coronavirus
