FEDS SHOULD HELP STATES BASED ON FISCAL CAPACITY.

How will cities and states recover if their funds are so depleted due to the coronavirus crisis that they cannot provide basic services and make payroll for their workers? As has been reported, state budget shortfalls could exceed $500,000,000,000 in 2020. New York alone, expects to lose between $10,000,000,000 and $15,000,000,000 in tax revenue.

Joshua McCabe, assistant dean of Social Sciences at Endicott College, Beverly, Mass., and author of The Fiscalization of Social Policy: How Taxpayers Trumped Children in the Fight Against Child Poverty, has proposed emulating Canada's "fiscal equalization" transfer system. McCabe explains that Canada offers unrestricted cash to provinces --with more going to poorer provinces--to cover much of their budgets.

"The same could be done in the U.S. between the Federal government and the states," says McCabe. "There is no doubt that the states should receive aid based on fiscal capacity. Bankruptcies on the part of states, especially the bigger ones, could lead to worse economic fallout, driving us further into a recession, and possibly a depression.

'The answer lies in the varying fiscal capacity of each state. Fiscal capacity is the ability of...