About News Scheppach on the Opportunity States Have to Attack Income Inequality Jul 08, 2020 Raymond Scheppach Scheppach on the Opportunity States Have to Attack Income Inequality The surge in spending on Medicaid and other COVID-19-related health-care services, coupled with the collapse in revenues, is already devastating state governments' finances. It's likely to be years before revenues return to pre-pandemic levels. But the recovery will also provide an opportunity for states to rethink the way they tax their citizens and deliver services to them, and to replace existing policies with those that focus on reducing income inequality. States have far more policy levers than any other level of government, and it is time for them to provide the leadership on this issue. It seems clear now that the greatest long-term threat to our nation and to our democracy is the growing disparities in income and wealth. According to recent statistics, the top 1 percent receives 22 percent of the nation's income and holds 40 percent of its wealth. The COVID-19 downturn is worsening these disparities: More than 20 million individuals are now unemployed, at the same time that the stock market's performance has preserved or increased billionaires' wealth. In the rebuilding of state governments, it is critical to make changes in spending priorities, tax systems, the organization of government and the way services are delivered. While just about every policy area has an impact on inequality, the three most important are education, health care and taxes. Read in Governing Raymond C. Scheppach Ray Scheppach is the former Executive Director of the National Governors Association (NGA) serving from January 1983-January 2011. Here, he became a specialist in the role of states in the formulation and implementation of public policy as well as in a broad range of domestic policy issues including welfare, education, health care and economic development. He was listed as a top association lobbyist by the Hill Magazine in 2006, 2007, 2008 and 2010, and Fortune Magazine listed NGA as the 12th most powerful lobbying organization in 1999. Read full bio Related Content Raymond C. Scheppach The Intergovernmental Grant System Research State and local government fiscal systems have increasingly become vulnerable to economic changes. Over the past three decades, state and local deficits during economic recession have been larger and deeper each time. New Roles for States in Health Reform Implementation Research State policies and implementation practices will largely determine whether the new federal health reform law translates into more affordable coverage and access to health care services. States will play particularly important roles with respect to Medicaid expansion, the creation of insurance exchanges, and the new market rules for insurance. Scheppach: COVID-19 Will Turn the State Pension Problem Into a Fiscal Crisis News You may be wondering why, over the last few months, the state pension problem – normally not a subject of widespread discussion – has been in the news. The problem – and it’s a big one – is that many of the public employee pension plans run by states don’t have enough money in them to make upcoming pension payments to retired state workers. Plummeting Tax Revenues Will Put Governors in Tough Budget Situations News According to Batten's Ray Scheppach, the magnitude of the coronavirus fiscal crisis that governors and their states will have to face is just starting to emerge. And that crisis will affect states’ abilities to do everything from paying teachers to paving roads to providing social services.