It’s a disgrace that Congress didn’t include funds for State & Local government as a priority in any stimulus funding to this point and continues to drag its feet. It’s even sadder that New York has to continue to beg for basic funding for 9/11 heroes.

The cost of the Coronavirus has largely fallen upon State & Local governments. And with nearly a third of cases nationwide and ridership on the MTA (critical infrastructure) down 93%, New York deserves its fair share. It isn’t just a matter of fairness; it’s a matter of economic importance. When airlines are getting direct assistance to retain their employees, the Fed is effectively lending to all corporations that can enter the bond market and backstopping banks through the discount window, State & Local governments, major employers who will need to lay off critical workers need support too.

Local leaders have however gone about making the argument in the worst possible way: by asking for a bailout. New York doesn’t need to be bailed out; instead it needs to get a rebate on the massive taxes that New York individuals and corporations contribute to the nation. New York contributes 8% of the Federal tax base, yet only receives 6% in return (albeit in proportion to population). For ever dollar that we send to Washington, we only get $.90 in return. So this isn’t so much being bailed out as getting back just a small fraction of the trillions we have contributed to the national tax base for years.

The issue is even more acute for New Jersey who has also been hardest hit. It’s always funny to me that national leaders who rail against government redistribution always seem to come from states that benefit from the largess of government spending. More good reading on this.