SSTI Digest

A new Pew study sheds light on how states utilize budgeting tools in response to natural disasters. The study identifies five key tools used by states — statewide disaster accounts, rainy day funds, supplemental appropriations, transfer authority, and state agency budgets — and discusses eligibility and restrictions around each. Not all states have access to each tool, and their availability is displayed in the graphic, below. While Pew’s research does not specifically address COVID-19, states are already beginning to use some of these budgeting measures to address their emerging shortfalls.  

As the world begins to emerge from the “Great Lockdown” and governments increasingly turn their efforts towards reopening economies, many will look to past recessions for lessons on recovery. This edition of Useful Stats examines the rate of real GDP recovery by state following the recessions of 2001 and 2008. According to their latest projections, the Congressional Budget Office expects that the U.S. economy will not recover from the current recession until after 2021. However, as seen after the recession in 2001 and again after the Great Recession of 2008, states recover at widely different rates. As shown in the map below, nearly every state had fully recovered to pre-recession levels of GDP within one year following the recession from March to November of 2001. Only three states took longer to recover — with Connecticut taking two years, and Delaware and New York both fully recovering after three years. As the longest lasting recession since the Great Depression, the Great Recession had a significantly larger impact on state productivity than the 2001 recession, resulting in a national recovery that took three years to reach pre-recession level of…

School buses across the country are helping school children as they finish a decidedly unconventional academic year but they aren’t transporting students, they are acting as mobile Wi-Fi units bringing connectivity capability to students who lack broadband service. As the coronavirus pandemic closed schools across the country, many in rural or low-income areas without internet access were left scrambling as classes went online. Equipping buses with Wi-Fi to help accommodate the online learning is a short-term solution to a much bigger problem. Beyond the transition to online learning to complete the school year, the social distancing in place to stem the transmission of the coronavirus has increased the use of communications services as Americans try to stay connected, and in turn highlighted the hardships for those who lack connectivity. The current push to online education, remote working, virtual gatherings, telehealth medicine, online shopping, and more, has exacerbated the challenges caused by a lack of broadband coverage or access throughout the country. A report earlier this year from the Pew Charitable Trusts noted that estimates on the number of Americans that…

While few will be able to escape the resulting hardships of the current economic downturn, America’s most economically vulnerable communities — those where household finances were already unstable and work scarce — will be hit hardest by the recession currently underway. The Economic Innovation Group recently began a research initiative called the Neighborhood Poverty Project which tracks changes in the number and composition of metropolitan high-poverty neighborhoods from 1980 to 2018 with the primary goal of substantiating the idea that returning to the pre-crisis “normal” of national growth is not enough to lift America’s highest-poverty neighborhoods. The project finds that the number of neighborhoods in which 30 percent or more of the population lives in poverty doubled from 1980 to 2010. Although the last decade saw national economic growth, not all reaped the benefits. There are a number of inequalities that high-poverty neighborhoods face as compared to low-poverty places (defined here as places where less than 20 percent of residents are below the poverty line). For example, high-poverty neighborhoods have lower education levels (more than one-fourth of adults…

A recent economic-impact study by Summit Consulting and the W.E. Upjohn Institute for Employment Research analyzed the overall effect of projects undertaken by the Manufacturing Extension Partnership (MEP) on the U.S. economy in FY 2019 and found that the investment of federal dollars into the MEP Centers yields, in the most conservative model, a return on investment of 13.4:1 (from the $140 million federal investment). The study also found that total employment in the U.S. was nearly 217,000 higher because of MEP Center projects. 

SBA began offering a second round of the Paycheck Protection Program (PPP) on April 27, and SBA’s data indicate this round is better distributed across businesses and the states than the first. As of May 8, round two has approved $189 billion across nearly 2.6 million loans, 55 percent more than in all of round one. The average loan size in round two is $73,488, which is a significant drop from the first round’s average of $206,022. Combined, $531 billion has been distributed in 4.2 million PPP loans. Despite the national increase in loan approvals, 20 states have received fewer loans so far in round two. One reason that per-state award levels are diverging is that loan approvals are increasing on a per capita basis: from 5.0 loans per thousand in round one to 7.8 loans per thousand in round two. As round two of the PPP has so far approved just 54 percent of round one’s funding level, round two has seen fewer dollars flow to almost every state. California, Nevada and the territories are the only regions seeing greater volume so far in round two. Every state has seen its average loan size decrease by at least half and many by closer to two-thirds,…

The U.S. Cluster Mapping Portal has received a data refresh with updated cluster profiles and performance benchmarks for all U.S. regions. This free tool is useful for understanding regional composition of traded sectors and strengths, which could be especially beneficial in these challenging times as businesses attempt to restore their supply chains.

As the economic fallout continues from the coronavirus pandemic and associated shutdown, states are still uncertain as to what their financial situations might be as they attempt to craft their new spending plans for a quickly approaching new fiscal year, which for most states start July 1. Last month, New Jersey state leaders took a unique approach to the situation by extending the current fiscal year from June 30 to September 30. The extension addresses a number of issues. The extension allows the state to delay adoption of their state’s new 2021 state budget by three months, allowing time for lawmakers and officials to assess the economy and state finances after the worst of the coronavirus pandemic subsides. Additionally, New Jersey, like most states with a state income tax, also extended their deadline for paying state taxes to July 15 from April 15, in order to align with the federal government’s pandemic-related 90-day extension to file federal income taxes. By extending the fiscal year to September 30, it will retain state income tax revenue in the current fiscal year, which will presumably reduce the size of the budget hole the state will have to address.…

U.S. Secretary of Commerce Wilbur Ross today announced that the Department’s Economic Development Administration (EDA) is now accepting applications from eligible grantees for Coronavirus Aid, Relief, and Economic Security Act (CARES Act) supplemental funds (EDA CARES Act Recovery Assistance) intended to help communities prevent, prepare for, and respond to coronavirus. EDA will make the recovery assistance grants under the  under the authority of its Economic Adjustment Assistance (EAA) program, which is intended to be flexible and responsive to the economic development needs and priorities of local and regional stakeholders. EDA CARES Act Recovery Assistance investments will support a wide range of non-construction and construction activities, including Revolving Loan Funds, in regions across the country experiencing severe economic dislocations brought about by the coronavirus pandemic. Examples of projects that EDA may fund through its CARES Act Recovery Assistance include economic recovery planning and preparing technical assistance strategies to address economic dislocations caused by the coronavirus pandemic, preparing or updating resiliency…

Frontline workers in Michigan who don’t have a degree may find a tuition-free pathway to college or a technical certificate, in the same manner as the G.I. Bill following World War II, while others states are also pursuing options for increased educational opportunities for workers who have lost their jobs due to COVID-19. Frontline workers in Michigan may have the opportunity to obtain a college degree or technical certificate if a proposal by Gov. Gretchen Whitmer is passed. The governor announced the initiative, called Futures for Frontliners, last week. It was inspired by the federal government’s G.I. Bill following World War II that enabled free tuition for soldiers returning from the war. Whitmer said the program, which the state described as the first of its kind in the country, is a way to thank those on the front lines of the crisis. “This program will ensure tuition-free college opportunities and give these dedicated Michiganders an opportunity to earn a technical certificate, associate degree or even a bachelor’s degree,” the governor said in a release about the initiative. Last month a bipartisan…

As college students close out highly disrupted spring semesters, higher education institutions across the country are trying to determine what the fall semester will entail, which has proven to be tricky at best. On campus or online instruction, hybrid plans and increased protections for students’ wellbeing are all topics administrators are grappling with in the midst of the pandemic. Meanwhile, prospective students are up in the air regarding their plans, as well, with a recent report revealing that domestic undergraduate enrollment for four-year institutions could decline 20 percent. A report from SimpsonScarborough, a higher education research, branding and marketing agency, showed that one in 10 U.S. high school seniors who were planning to attend a four-year college or university prior to the pandemic have already made alternative plans, with nearly half planning to attend a community college, about a third planning to enroll in an online college, and the remainder thinking they may not attend college at all this fall. The firm sampled high school seniors and current residential college students in March and replicated the survey a month later to better understand…

In early March, we shared that organizations who use a web address ending in .ORG should be aware that a management change could result in registration fees for domain names doubling. Late last week, the news broke that ICANN rejected the sale of the .ORG registry to private equity firm, Ethos Capital. The ICANN Board faced a unique and challenging scenario that would impact more than 10.5 million domain names, one of the largest registries. After deliberation, the board decided that the public interest is better served in withholding consent as a result of various factors that create unacceptable uncertainty over the future of the third largest generic top-level domain registry. A number of factors were considered such as the request to contract with a completely different form of entity rather than maintain its 20-year contract with the mission-based, not-for-profit; the protection and benefits of .ORG registrants as a result of the conversion; and, the uncertainty of an untested Stewardship Council that might not be properly independent. Nearly 900 organizations and 64,000 individuals joined in the #SaveDotOrg campaign to stop the sale of the .ORG registry.…