Recapping last week: Jobs, UI, state budget, federal relief

By: Emily Makings
9:05 am
May 11, 2020

Nationally, 20.5 million jobs were lost in April, according to the U.S. Department of Labor on Friday. For an arresting, grim picture of how this figure compares to history, check out the Saturday New York Times front page. (The underlying charts are from this story.)

The national unemployment rate in April was 14.7 percent. The Employment Security Department (ESD) will release April employment figures for Washington on May 20. (In March, the unemployment rate in Washington increased from 3.8 percent to 5.1 percent.)

In the meantime, initial unemployment insurance (UI) claims continue to be historically high in Washington, though down from the previous week. Kriss notes, “The five sectors with the greatest number of claims are, in descending order, accommodation and food services; health services and social assistance; retail trade; construction; and manufacturing. Together these five sectors accounted for nearly two-thirds of the jobs lost.”

An early, preliminary Economic and Revenue Forecast Council estimate puts the state revenue loss due to the downturn at $3.8 billion for 2019–21 and $3.3 billion for 2021–23. However, this is a highly uncertain estimate. It does not have the advantage of any actual collections data for taxable activity that occurred in March or April. The official forecast next month will have more data to work with. Still, these figures suggest (unsurprisingly) that the 2019–21 budget will be out of balance.

Under the CARES Act (one of the federal relief bills), the state of Washington and its four counties and one city with populations over 500,000 received $2.953 billion from the federal government. (These funds cannot be used to cover revenue shortfalls.) The state government has announced it will allocate about $300 million of its share to the other local governments in the state—here’s how much each locality will get. According to the Wall Street Journal, congressional talks about a new round of federal relief have stalled, but the House speaker could release a draft soon: “It is expected to include more than $750 billion in aid to state and local governments, as well as direct support to Americans.”

Finally, we continued our series on the state budget during the Great Recession with an in-depth look at the spending cuts that were made:

To summarize them: Federal stimulus funds, new fees, higher tuition, and higher local levy limits allowed for reduced state spending over the period. Several rounds of across-the-board cuts were made and efficiencies were found in many budget areas. Employee compensation was reduced. State-funded human service programs were cut (but so were Medicaid programs). Major non-basic education programs were eliminated. The most substantial budget gimmick was a one-day school apportionment shift in 2011.

Previous posts in the budget series:

And previous weekly recaps:

Categories: Budget , Economy.
Tags: COVID-19 , COVID-19 & the economy