How do you go bankrupt? Two ways – first gradually, then suddenly. – Hemmingway, “The Sun Also Rises”

The coronavirus crisis has had two catastrophic impacts on the finances of New Jersey and other states. On the expense side, it has required great expenditures for medical equipment in short supply in a largely unregulated competitive market, as well as overtime for emergency workers. On the revenue side, the disruption of economic activity due to lockdowns has drastically cut sales tax receipts and will in time have the same impact on income taxes. In addition to those direct effects, there may well be a knock-on effect on local government property tax receipts because the ability of some business and individual property owners to pay will be impaired.