State Outlook Remains Negative; Direct Fiscal Relief Still Needed
State governments need direct relief. There have been zero dollars of direct, unencumbered aid for state and city governments allocated since the COVID-19 pandemic began.
There has been no tax revenue or federal government windfall to state governments.
State government revenues were down a little over 5% year over year between April and September 2020 versus 2019, according to Tax Policy Center data.
State revenue forecasts remain mixed. We review three examples (California, New York, and Texas) in order to give readers an idea of the range of state fiscal outlooks. Downside potential remains if another COVID-19 occurs in coming months as well.