Financial catastrophe looms for state and local governments

The impact of the fiscal crisis "will be even worse than the Great Recession — by a factor of at least two," warned one mayor.
Image: Las Vegas Strip
The Las Vegas Strip is deserted as casinos and other business are closed because of the coronavirus outbreak, on April 14, 2020.John Locher / AP

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State and municipal governments across the country are clamoring for the federal government to rescue them from what could quickly become a fiscal catastrophe, saying that they may need as much as three quarters of a trillion dollars as the coronavirus pandemic dries up many of their revenue sources.

Without the help, these governments will need to lay off or furlough workers, reduce benefits, cancel projects, defer construction and maintenance and more. The impact of the fiscal crisis "will be even worse than the Great Recession — by a factor of at least two," warned Nan Whaley, the mayor of Dayton, Ohio.

But state and local governments like Dayton's will have to wait until at least May before Congress considers further economic relief, Senate Majority Leader Mitch McConnell has indicated. The House is set to vote Thursday on an interim round of coronavirus aid aimed at small businesses, and while Democrats sought to include roughly $150 billion in funding to shore up state and local budgets, the money didn't make it into the final bill because of objections from Republicans and the Trump administration.

Here's what to know about the coronavirus, plus a timeline of the most critical moments:

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California town tests every resident for COVID-19

Virus shutdowns will likely make NFL draft most bet on ever

ATLANTIC CITY, N.J. — For those who haven’t mastered the odds of Belarussian soccer or Russian table tennis, this week’s NFL draft gives U.S. gamblers their first opportunity in weeks to bet on an event about which they actually know something.

With major sports shut down for more than a month because of the coronavirus outbreak, American sportsbooks say they expect football’s annual draft to be the most bet on ever.

Desperate to offer a familiar event, online sportsbooks say they are seeing a much greater volume of bets on the draft this year.

Several sportsbooks estimated the gambling industry as a whole could see $5 million wagered on the draft in the U.S. this year; FOX Bet estimated the market at $20 million, up from a typical draft of about $1 million.

Vegas workers push back after call to reopen casinos, hotels

After Las Vegas Mayor Carolyn Goodman called Wednesday for the swift reopening of hotels and casinos, many who earn livelihoods in such establishments said they were afraid to return unless strict safety measures were introduced for themselves and guests.

Although Goodman said the businesses should reopen, she did not provide any guidelines on how they should handle social distancing and other safety measures to prevent the spread of coronavirus.

"I want us open in the city of Las Vegas so our people can go back to work," Goodman said in a CNN interview. She was asked how that could be accomplished while prioritizing employees' safety by implementing social distancing.

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Yale says it will not seek relief funds, wants it to go to others

Yale University said Wednesday that although it is eligible for $6.9 million in coronavirus relief funding passed by Congress, it will not seek the money.

The money would come from the "higher education emergency relief fund" that was part of the CARES Act, which also provides direct payments to Americans and expanded unemployment benefits.

Yale said in a statement that while it is "experiencing great budgetary pressure as a result of the pandemic," it hopes the government will use its share to support other colleges and universities in Connecticut that are having their existence threatened by the epidemic.

"We wish to reassure Yale students that this decision will in no way diminish our financial support for them at this critical time," Yale said. 

Harvard drew criticism from President Donald Trump this week regarding funding from the CARES Act. Harvard said Wednesday that it was allocated higher education emergency relief fund dollars it never sought or received and that it will now not accept the money.

On Tuesday Harvard in tweets suggested it would accept that funding, pledging that all of it would be used "to provide direct assistance to students facing urgent financial needs due to the COVID-19 pandemic."

Hot Pockets heiress wants to serve prison sentence at home

An heir to the Hot Pockets fortune who was sentenced to five months in prison in the college admissions bribery scheme asked a judge Wednesday to allow her to serve her punishment at home because of the coronavirus pandemic.

Lawyers for Michelle Janavs, who is supposed to report to prison next month, said in a legal filing that she has a health condition that makes her particularly vulnerable if she were to get the virus behind bars. Instead, she should spend five months in home confinement, her attorneys said.

“If Ms. Janavs were to surrender to (Bureau of Prisons) custody, she is highly likely to become infected with COVID-19. And because of her underlying health condition, she faces a much higher risk than others of serious complications, hospitalization, or death from the virus,” her lawyers wrote.

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Texas ends ban on abortions during pandemic

Texas’ ban on abortions prompted by the coronavirus pandemic has ended, and clinics said they were resuming services.

State lawyers on Wednesday said that less restrictive health care rules were in effect. In a filing in the U.S. Western District Court of Texas, the lawyers cited an executive order Gov. Greg Abbott issued last week that said health care facilities could remain open if they reserved a quarter of their beds for COVID-19 patients and didn’t request personal protective equipment from the government.

“There is no case or controversy remaining,” the lawyers said.

Texas' Attorney General Ken Paxton last month had sought to halt all abortions that were not "immediately medically necessary," citing the need to preserve medical resources to coronavirus patients. 

The order was challenged in court, and one of the Southwestern Women’s Surgery Center, of Dallas, said on its website Wednesday that it had resumed scheduling all services. Amy Hagstrom Miller, CEO of another plaintiff, Whole Woman’s Health clinics, told the Dallas Morning News that the order allows abortion providers to “resume both medication and procedural abortions.”

Los Angeles County to offer tests to essential workers who don't have symptoms

Los Angeles County will begin offering COVID-19 tests to grocery store workers, first responders and health and government workers even if they don't have any symptoms, the Los Angeles mayor announced Wednesday.

Mayor Eric Garcetti said the expanded testing starts Thursday and is "a very important milestone on the road to reopening." 

People with no symptoms can have COVID-19 and can spread it, health experts say.

Los Angeles Police Department Chief Michel Moore said that the expanded testing could be a relief for officers who have come in contact with suspicious people, but who did not show symptoms. Because of availability, testing has had to be prioritized but will now include those members, he said.

"I know that that's going to relieve a lot of our men and women who are worried about going home and potentially infecting their family," Moore said. He said a police detective had the virus but had no symptoms and was unaware of it, and his wife came down with COVID-19 around two weeks ago and died.

Judge rejects California churches' efforts to hold in-person services

SACRAMENTO, Calif. -- A federal judge on Wednesday said he will deny a bid by three Southern California churches to hold in-person church services during the pandemic, saying that government’s emergency powers trump what in normal times would be fundamental constitutional rights.

U.S. District Judge Jesus Bernal in Los Angeles said he will reject the temporary restraining order the churches sought against Gov. Gavin Newsom and other officials. They argued that the state’s stay-at-home orders violate the First Amendment right to freedom of religion and assembly.

“During the state of emergency the executive powers are in effect, in that they are empowered to provide for emergency remedies which may infringe on fundamental constitutional rights,” Bernal said at the end of the hourlong hearing. He said he will soon issue a formal ruling.

Many churches have been holding online services. California officials on Friday said religious organizations can have drive-in services so long as congregants don’t have personal contact.

Top health official says he was ousted for pushing back on Trump's 'game changer' drug

A top official at Health and Human Services says he was ousted from his job this week for pushing back on demands that he sign off on a coronavirus treatment that was advocated by the president.

"I believe this transfer was in response to my insistence that the government invest the billions of dollars allocated by Congress to address the COVID-19 pandemic into safe and scientifically vetted solutions, and not in drugs, vaccines and other technologies that lack scientific merit. I am speaking out because to combat this deadly virus, science — not politics or cronyism — has to lead the way," Dr. Rick Bright said Wednesday in a statement issued by his lawyers.


“Specifically, and contrary to misguided directives, I limited the broad use of chloroquine and hydroxychloroquine, promoted by the Administration as a panacea, but which clearly lack scientific merit. While I am prepared to look at all options and to think 'outside the box' for effective treatments, I rightly resisted efforts to provide an unproven drug on demand to the American public," Bright said in the statement, which was first reported by the New York Times.

Trump had repeatedly touted the drug as a potential "game changer" in treating coronavirus patients. A preliminary nationwide study, however, found the drug was ineffective in treating the virus and there were more deaths among those given hydroxychloroquine versus standard care.

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