Gov. Gavin Newsom says that unemployment in California amid the COVID-19 pandemic has far exceeded what it was during the peak of the Great Recession, with 4.7 million people filing for jobless benefits, requiring the state to borrow billions of dollars more from the federal government to cover claims. At a news conference Thursday to present a revised state budget for the fiscal year starting July 1, Newsom said the state will need $43.8 billion to cover unemployment claims in the new year, a 650% increase over what was originally proposed.
The federal government is covering the $600 per week bonus payment to unemployed workers, but state governments are still responsible for base unemployment benefits. Thanks to COVID-19, this has skyrocketed from about $6 billion to $44 billion in California, and every other state is facing a similar situation.
And that’s just the start. Not only are expenses going up, but revenue from sales taxes and income taxes have cratered. The result is massive cuts in education, Medicaid, and social welfare programs for the poor. And since California, like most states, is required to balance its budget, there’s no way around this unless the federal government comes through with a huge aid package. At the moment, though, there’s no telling whether Donald Trump and his fellow Republicans are willing to do this. They are willing to urge everyone to engage in behavior that will make the COVID-19 pandemic even worse, but so far that’s about all they’ve been willing to commit to.