Download PDF State Fiscal Outlook: Pre- & Post-COVID-19 Today, NASBO released its Spring 2020 Fiscal Survey of States
As of July 19, 47 states have enacted a full-year budget for fiscal 2022
Sales tax collections for the month of May are expected to show a steeper decline as they will reflect a full month of April data highlighting the economic impact of COVID-19. Personal income taxes and sales taxes combined represent 75 percent of all state general fund revenue collections, as illustrated in NASBO’s recent blog post on State Budget Basics . Summary In many ways, it is expected that the worst is yet to come for tax revenues as states begin to feel the full economic effects of the COVID-19 pandemic. In the coming months, nearly all sources of state tax revenue will be impacted, including: personal income taxes, due to increasing layoffs and stock market volatility, sales taxes, as consumers spend less, corporate income taxes, with the expected decline in corporate profits, gaming revenue with less casino and other gaming activity, and motor fuel taxes, due to limited driving. The declines in state tax collections due to COVID-19 are expected to well exceed the 11.6 percent drop states experienced during the Great Recession, with some states anticipating declines of more than 20 percent
Over the past year, various facets of the budget process helped drive how and when states took fiscal actions in response to the COVID-19 pandemic. Does a state budget on an annual or biennial basis?
In a recent survey of state budget officers, [1] 44 percent of respondents noted that their state or territory has set up a separate office or unit to manage federal COVID-19 funds, and in most cases, this new division reports to the state budget office
The legislation details certain eligible use of the funds including responding to the public health emergency or its negative economic impacts, providing premium pay for essential front-line workers, replacing revenue losses due to the COVID-19 public health emergency, and necessary investments in water, sewer, or broadband infrastructure
Most states extended their tax filing deadlines to conform with the federal government, which resulted in 19 states counting revenue in fiscal 2021 rather than fiscal 2020. Among those 19 states, 17 states were able to report preliminary or estimated amounts for those deferrals
Download PDF The COVID-19 pandemic is placing significant stress on state budgets while also drastically reducing revenue sources that fund critical services to citizens
States are currently contending with revenue losses and increased spending demands related to COVID-19 as they work to finalize or adjust their fiscal 2021 budgets
Some states did not break down how the revenue replacement funds would be used on a project basis but identified in the narrative of their reports that these funds would provide temporary enhanced support to core government services that faced increased costs related to the COVID-19 public health emergency, such as corrections and public safety, education, public health, and human services