Expert says state job furloughs won't help much with $2.5B economic hole from pandemic

Over one million Michiganders - a quarter of the state's entire workforce - applied for unemployment in a month's time. 
Governor Gretchen Whitmer says you can now add state workers to that list. 

"These layoffs don't fix the problem, but it is important to show that we are willing to tighten our belts where we can," she said Wednesday,

The problem she is referring to, is the state revenue lost due to the coronavirus. 

"Revenues will be down about $2.5 billion," said Gabriel Ehrlich.

And that is money that has to be made up somewhere, said Ehrlich, an economic forecaster at University of Michigan.

"State governments have balanced budget requirements, so they cannot borrow their way out of this problem," he said.

The layoffs the governor announced today barely fill any of the $2.5 billion hole. 

"These layoffs will last for 10 work days," Whitmer said.

"What we've seen so far is only going to save about $5 million and that is not enough," Ehrlich said.

And this economic forecaster believes other dominoes will soon fall as well. 

"As more local governments realize that state revenue sharing is down we will see these tough decisions at a local level as well," he said.

Gabriel Ehrlich says the federal government has the ability to help with $500 billion to bail out the country during this crisis. It would help states, but hurt the national debt. 

"Now is not the time to worry about the national debt," he said. "Now is the time to get through this and we can pay for it later."

As for how long it is going to take, Ehrlich says everything depends on how fast the state's economy gets up and running again.