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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Metropolitan Transit Authority workers arrive to clean a New York subway station. Photo: Eduardo Munoz Alvarez/Getty Images

State and local governments across the country — which together employ nearly 20 million workers — are bracing for layoffs as they deal with the economic ramifications of the coronavirus.

The big picture: Stay-at-home orders have forced businesses to close and cut jobs, tanking state revenue from sales, personal income taxes and fees. Meanwhile, states have paid steep costs for emergency relief and for increases in social safety net programs like unemployment insurance on top of their usual services like police, mass transit and water.

  • The nonpartisan Center on Budget and Policy Priorities (CBPP) estimates that states could rack up more than $765 billion in budget deficits over the next three years.
  • 88% of local leaders say they're preparing for painful reductions in revenue this year because of the pandemic, according to a National League of Cities survey.
  • Nearly a third of them anticipate furloughing employees, while a quarter expects layoffs.

Why it matters: Nearly two-thirds of state spending goes to education, health care and transportation, per the CBPP.

  • Localities and states shed 3% of their workforce as a result of the 2008 financial crisis, according to census data. Half of them were teachers.
  • Those public sector jobs returned slowly and still haven't rebounded to the levels they were before the recession.
  • "[W]e should expect, among other effects, to see fewer teachers in classrooms, higher tuition at public colleges and universities, stingier coverage for Medicaid enrollees and forgone infrastructure improvements," wrote former Obama administration economic adviser Matthew Fiedler in a New York Times op-ed.

The state of play: Dayton, Ohio, has already furloughed nearly 25% of its workforce, and the city is planning to cut more.

Go deeper: States face economic death spiral from coronavirus

Go deeper

Ray LaHood predicts bipartisan push to aid public transit

Axios' Ina Fried (l) and former Transportation Secretary Ray LaHood.

Former Transportation Secretary Ray LaHood said he expects a bipartisan push in Congress to shore up public transportation during the coronavirus pandemic, as it did for the airlines earlier this year and is under pressure to do again.

The state of play: During an Axios virtual event, LaHood underscored that Americans are using cars, rather than public transit, during COVID-19 pandemic. Public transportation as a result has subsequently seen a massive drop in ridership and revenue along with it.

Tracking the pandemic's unequal impact

Expand chart
Data: Morning Consult/Axios; Chart: Will Chase/Axios

The pandemic was bound to hit the most economically vulnerable among us the hardest. New polling data from Morning Consult, out this morning, shows the degree to which those difficulties were more concentrated among people of color.

Catch up quick: The Morning Consult/Axios Inequality Index has tracked the economic experience of adults in three wage groups since May 2020. We began publishing the findings in May of this year, and six months in, we’re slicing the data a little differently — and looking at inequality between ethnicities.

1 hour ago - Health

WHO says Omicron poses "very high" risk

World Health Organization Director-General Tedros Adhanom Ghebreyesus speaking in Geneva in October. Photo: Fabrice Coffrini/AFP via Getty Images

The World Health Organization said Monday in a new risk assessment that it believes the COVID-19 Omicron variant poses a "very high" risk to the globe because it may be more transmissible than other strains of the virus.

Why it matters: Though the WHO acknowledged there are still many uncertainties associated with the variant, the agency said it believes the likelihood of potential further spread of Omicron around the world is "high."

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