As the potential economic impact of a global pandemic starts to crystalize, there has rightly been a lot of discussion about how individuals and businesses will fare—and what governments can do to support them. But what will happen to government finances? In particular, what happens to U.S. state and local governments, which are responsible for delivering much of the social safety net that individuals rely on to weather a crisis?

Therese McGuire is a professor of strategy at Kellogg who studies state and local finances. Kim Rueben is director of the State and Local Finance Initiative at the Urban-Brookings Tax Policy Center (which is publishing up-to-date articles on the coronavirus crisis here). The pair discuss how the crisis is likely to hit state and local budgets, and what we can learn from previous crises about how to keep states afloat, so they can continue to support their citizens.

This interview has been edited for length and clarity. Previously published in Kellogg Insight. Reprinted with permission of the Kellogg School of Management.