New Jersey will continue to battle the coronavirus outbreak for the foreseeable future, Gov. Phil Murphy told Yahoo Finance, who argued the state will need vast federal support in order to plug the fiscal “hole” created by shutdown orders.
The Garden State is the nation’s second-worst COVID-19 hotspot, trailing only neighboring New York in confirmed infections. In the U.S., over 1.2 million are infected and 60,000 have died: The Empire State has nearly 300,000 cases, while New Jersey is zeroing in on 117,000.
Amid a roiling debate about normalizing public life around the country, with some states already doing so, New Jersey plans to reopen golf courses, and state and county parks, on May 2.
Even still, Murphy told Yahoo Finance on Wednesday that “this is not going to be over in the next couple of weeks. Even if we bat .1000 and reopen our economy exactly the right way, without any mistakes, this virus, according to anyone who is an expert will suggest, is going to come back and bite us again.”
Currently, the virus has claimed more than 228,000 lives, infected more than 3.2 million globally — and decimated the U.S. economy. It’s why Murphy and other state governors have called on Congress and President Donald Trump to approve cash infusions to states in need, a request that’s bogged down in partisan infighting.
Yet barring that, the states have few options to respond, according to Murphy, a former Goldman Sachs executive and former U.S. ambassador to Germany under President Barack Obama. He expects the virus to continue battering the state’s economy.
“I don’t think there’s any amount of tax hikes you can put in place that comes close to what we’re talking about,” he said, citing the “$20 billion or more hole” created by shuttered businesses and laid off workers.
The only other option would be to cut services and layoff workers — at a time when the state’s residents need increased levels of support from the state for the “most significant crisis in the history of our nation,” Murphy said.
Given that the mid-Atlantic states have been hardest hit, Murphy argued it was imperative for the federal government to prioritize these states.
“We need a deep…sustainable relationship with the federal government,” he added. And when asked how long away the state is from a full reopening, Murphy cautioned it wouldn’t be soon.
“We’re still losing too many lives. We’re not there yet, we are still several weeks away,” he said.
‘Major inflection point’
Since then, the state has been able to flatten the curve, showing some stabilization in hospitalizations and a reduction in ventilator use. The number of days between doubling of cases has slowed statewide, but some counties have slipped backwards, Murphy said.
Once restrictions begin easing this weekend, the governor said that state police will be patrolling to ensure adherence to safety measures like social distancing and wearing of masks. However, he added that he could reverse his decision if residents don’t follow the rules.
Meanwhile, as New Jersey waits for federal aid, the Garden State is planning for a statewide reopening — and a new normal. That includes creating an all-star reopening commission including former Federal Reserve chair Ben Bernanke, and CEOs of Merck (MRK), Prudential (PRU) and Campbell’s (CPB).
The state government is looking at how to craft the reopening to include work from home, and warehouse, mass transit and restaurant capacity and cleaning guidelines.
Murphy told Yahoo Finance the unprecedented crisis requires the collective “wisdom” of public, private, small business and state government officials to determine how to handle what will — decades from now — be seen as a” major inflection point for how we go about our lives.”
Trenton has had to pivot full speed toward managing the coronavirus fallout, which is something Murphy didn’t anticipate doing given his initial focus on fixing the state’s finances. Rather than worrying less about indebtedness, the state needs to continue to spend.
“I’m less worried about the balance sheet right now, I’m much more worried about getting cash in the barrel to the point of attack,” he said.
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