Although Wayne County leaders have extended paid furlough to nonessential employees, experts warn about the long-term fiscal fallout from the COVID-19 pandemic.
On March 16, the county started paying furlough due to Gov. Gretchen Whitmer’s stay-at-home order, now effective until May 15. The length of time has already been extended three times.
Essential employees continue going to work. These are individuals who serve safety and public health, as well as necessary government functions, which is decided by officials who are in charge of their office.
“Wayne County continues to provide essential services during this pandemic, and many of our county employees are working remotely from home with great dedication,” Wayne County Executive Warren Evans told Fox2Detroit. “As our response to COVID-19 continues, we are reviewing what services are essential and which employees are needed to deliver them for the residents of Wayne County.”
Personal income tax is a large part of Michigan’s state tax revenue, according to The Mackinac Center for Public Policy. It accounts for about 65% of the state’s general funds that are unrestricted. However, as more people are staying home from work and making less money, many facets of society may face consequences as a result. State universities, prisons and Medicaid receive a large portion of this money.
Lawmakers have decided how much of the funds higher education receives, but universities may face difficulties in attracting or retaining students to pay their tuition.
Medicaid eligibility may increase as people lose their jobs or companies shut down. This rise in Medicaid users, however, will not match the existing federal funds available.
As different parts of the economy close in an attempt to slow the spread of COVID-19, there are many immediate and potential long-term repercussions. The decrease in state income tax is only one of the potential outcomes.
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