States facing massive pandemic-induced budget deficits could be forced to cut public health programs, a result that could imperil efforts to ramp up testing and contact tracing for the virus.
The prospects for state government finances are bleak. They will suffer a 20% drop in general fund revenues due to the pandemic, according to a report from the Foundation for Government Accountability. By comparison, general fund revenues experienced a 7% decline in the first year of the Great Recession. Most states have balanced budget requirements in their constitutions that require state politicians to cut budgets when deficits appear.
“In having a public health emergency and fiscal crisis at the same time, you don’t have all the tools you normally do to cut state budgets,” said Shelby Kerns, the executive director at the National Association of State Budget Officials. Public health programs are usually one of those tools, but Kern said that “a lot of the spending for testing and tracing come through public health budgets.”
Public health programs are designed to protect the safety and improve the health of communities. They include programs to prevent the spread of infectious diseases, improve food and water safety, and promote physical activity and fitness.
Utah has already cut $2 million allocated to local health departments to close its budget gap. In states such as Utah, which has not yet reached 10,000 confirmed cases of the coronavirus, such cuts may be feasible. But they may not be in states such as New York, which has over 370,000 confirmed cases, and California, which has over 110,000. New York is facing a budget shortfall of $13.3 billion, while California’s is projected to be $54.3 billion.
“Public health programs have always been a big deal, and now, they are a bigger deal,” said Stan Dorn, director of the National Center for Coverage Innovation at the liberal Families USA, a national, nonpartisan consumer healthcare advocacy organization. “With the pandemic, public health programs are assuming a hugely important new role given that the Trump administration has ceded leadership in this area to the states. We hope the states don’t cut the efforts to combat COVID-19, the testing, contact tracing, and isolating people who have the virus.”
At present, the United States is well short of meeting its testing and contact tracing needs, according to public health experts. The Harvard Global Health Initiative estimated the U.S. should be conducting 900,000 coronavirus tests per day. The U.S. currently performs about 264,000. By late April, the U.S. had 2,000 contact tracers. The Johns Hopkins Bloomberg School of Health estimated that the country needs 100,000. Meeting those numbers will be difficult if states must cut public health spending.
“It’s very worrisome,” said Dorn. “Public health agencies have been increasingly squeezed for funds over the years. We do not have a robust public health infrastructure.”
Many governors and state legislators are hoping that Congress will help them avoid significant cuts with federal aid. The CARES Act, passed in March, contained $150 billion in aid for state and local governments, aid that was limited to pandemic response expenses. The HEROES Act, which House Democrats recently passed, includes $915 billion in such aid. It has been held up by Republicans in the Senate.
The exact amount states spend on public health programs is not available. Total public health expenditures from all government sources were $93.5 billion in 2018, according to the National Health Expenditures data. The data also show that public health spending stagnated in the aftermath of the Great Recession, from 2009 to 2011, and has risen at an average 1.7% real rate annually since then.
The state of Colorado has so far only cut $516,000 from the budget of the Department of Public Health and Environment, funds that were supposed to help local health departments improve their electronic records.
Linda Gorman, director of the Health Care Policy Center at the conservative Independence Institute in Colorado, said there are still areas in public health that politicians can cut.
“There are all sorts of oddball public health programs funded through the schools that can be cut without much damage,” Gorman said. “All of the health programs that are now taught through physical education classes — most of that could be cut.”
