States See Tax Revenue Drop by $31 Billion
The losses are tied to the coronavirus epidemic
The COVID-19 pandemic has cost state governments an estimated $31 billion in lost tax revenues to date, and those numbers could get worse without agreement on a new federal stimulus package, according to an analysis from Urban Institute.
The report from Urban Institute is based on an analysis of state tax revenues collected during the first six months of the pandemic, compared to the same period last year. The loss represents a 6.4 percent decline in revenue across the 44 states with data available through August. Revenue declines could be steeper in the second half of the year, in part because federal $1,200 stimulus checks and additional $600-per-week unemployment benefits enacted as part of the CARES Act in March have largely expired.
“While states have been reopening their economies, it will take a long time for business activity to return to pre-pandemic levels, with some activities and industries facing a very slow recovery and some consumption, for example, travel and entertainment purchases for the last six months will not be replaced,” said the report’s author Lucy Dadayan.
Though the White House has pushed for another COVID-19 relief package, it has balked on aid for state and local governments to help cover budget deficits incurred as a result of the pandemic. Earlier today, President Donald Trump said Speaker Nancy Pelosi (D-CA) “wants to bail out badly-run Democrat states and cities. She wants money for things you could – your pride couldn’t let it happen.”
Pelosi said the administration and Senate Republicans are misguided in their thinking. “This is about a pandemic, in case you haven’t noticed,” Pelosi said on MSNBC last night. “This is about a pandemic where we are trying to compensate the states for the money that they spent on the pandemic and the revenue that they lost. That’s one thing that the president, they’ve all just ignored. The president said, ‘I’m not paying blue states,’ all that stuff. They haven’t taken this seriously.”
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