States turn to cash reserves as coronavirus strains budgets

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Copyright 2020 The Associated Press. All rights reserved.

New York Governor Andrew Cuomo speaks during a news conference at a COVID-19 coronavirus infection testing facility at Glen Island Park, Friday, March 13, 2020, in New Rochelle, N.Y. State officials have set up a containment area in the New York City suburb, where schools and houses of worship are closed within a 1-mile radius of a point near a synagogue where an infected person with coronavirus had attended events. State officials stress it is not a lockdown. The vast majority of people recover from the new coronavirus. According to the World Health Organization, most people recover in about two to six weeks, depending on the severity of the illness. (AP Photo/John Minchillo)

JEFFERSON CITY – States across the U.S. are allocating hundreds of millions of dollars to respond to the coronavirus, even as the U.S. government prepares to send billions more their way.

Many states have built up sizable stockpiles in their “rainy day” funds during several robust years of tax collections. Some governors and state lawmakers now are tapping into those savings for emergency expenses. Others are looking to set aside even more in reserve, fearing the economic uncertainties stemming from the coronavirus could send tax revenues into a tailspin.

“Forget the closure on Broadway — the loss of revenue to the state government, right now, is incalculable,” said New York Gov. Andrew Cuomo, a Democrat.

He pulled the curtain on Broadway theaters this past week while banning gatherings of 500 or more people.

President Donald Trump said Friday that he would free up as much as $50 billion for state and local governments as he declared the virus pandemic a national emergency. Many governors also have declared emergencies, giving themselves greater flexibility to spend money and waive regulations as needed.

“All the resources we can have on hand — to make sure if things get worse — we want,” said Missouri Gov. Mike Parson, a Republican, while announcing a state of emergency just hours after the president did so.

For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.

State and local public health agencies have been on the front lines of the response, monitoring and testing those suspected of having the virus that causes the COVID-19 disease. Costs are mounting for staff time and medical supplies.