Written by Brian Mann for North Country Public Radio on April 24, 2020

Apr 24, 2020 — So far Congress hasn’t allocated money to stabilize state and local governments around the U.S. whose tax revenues have been devastated by the pandemic. Some conservative leaders have floated the idea of allowing states to file for bankruptcy. But Republicans in New York say that could be devastating for Upstate communities and the North Country where state-funded jobs and grants drive the economy.

A region shaped by taxpayer spending

When you think about the North Country’s economy, you may think tourism, small factories, dairy farms. And those are a big deal. But the biggest deal of all is a massive pipeline of jobs and cash flowing every year from Albany.

Taxpayer funded jobs account for about a quarter of all employment here, so it mattered a lot when Senate Majority Leader Mitch McConnell floated this idea on a conservative radio show earlier this week.

“I would certainly be in favor of allowing states to use the bankruptcy route,” Sen. McConnell said.

“My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.”

McConnell’s argument sparked this response from Governor Andrew Cuomo: “How do you not fund police, fire, teachers and schools in the midst of this crisis?”

Cuomo’s fellow Democrat Senator Kirsten Gillibrand also pushed back yesterday in a townhall meeting held on-line. “In the last bill we tried to add $150 billion in to the package to go to states and localities and cities, but Mitch McConnell blocked that,” she said.

NY Republicans break with McConnell

State and local governments have seen their tax revenues collapse as people have lost jobs and stopped spending money. McConnell’s idea that bankruptcy might be the best option is also drawing heavy fire from his fellow Republicans here in New York.

Congressman Peter King called the idea “shameful and indefensible.” Speaking yesterday, North Country Congresswoman Elise Stefanik also said the impact on her North Country district would be severe.

“When it comes to the school district needs and New York state employees in my district, it would be devastating if there was not the federal support,” Stefanik said.

Congressman John Katko, a Republican whose district includes Syracuse also pushed back against McConnell yesterday. “I don’t think bankruptcy is a good idea for states, I don’t think that’s the answer for anything.”

Again, the stakes here are high. According to the most recent state Labor Department statistics there are 40,000 government and education workers in the North Country, the majority of them funded by Albany.

Albany also sends hundreds of millions of dollars a year to the region to help businesses, hospitals and other nonprofits.

McConnell: State aid remains “on pause”

Bankruptcy for New York state is highly unlikely. Under current federal law, that step isn’t allowed. But if Albany is forced to adopt a severe austerity budget because of the pandemic job cuts could be severe.

Despite those facts, McConnell has signaled repeatedly that helping states is something he’s leery of.

“We all have governors regardless of party who would all like free money,” Sen. McConnell said on the Hugh Hewitt radio show. “That’s why I said yesterday we’re going to push the pause button here.”

For now this fight in Washington DC will mean even more economic uncertainty here in the North Country, as the fallout from the COVID-19 crisis grows.

You can read the full article at https://www.northcountrypublicradio.org/