Budget Blog

The American Rescue Plan Act (ARPA) of 2021 was signed into law by President Biden on March 11. The bill includes $350 billion in emergency funding for state, local, territorial, and Tribal governments. These State and Local Fiscal Recovery Funds are to remain available until December 31, 2024. 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 ... More

States’ budget processes, documented in NASBO’s 2021 edition of Budget Processes in the States released today, play a critical role in how spending and revenue decisions are made. 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? How frequently does the state release official revenue estimates? Does the executive branch have the authority to spend unanticipated federal funds without legislative approval? Can a state carry over a deficit under certain conditions? ... More

State Revenues Decline for First Time Since the Great Recession, With the Worst Still to Come The majority of states have closed out fiscal 2020 and, as expected, most states experienced a decline in general fund revenues, both compared to prior-year (fiscal 2019) collections and to pre-COVID revenue projections. This large swing in tax collections led to a roughly 6 percent shortfall for states for fiscal 2020 in just a few months’ time.  This initial decline is only the beginning of what is projected to be a multi-year revenue challenge facing states with the potential to dampen the economic recovery. As states ... More

As of October 1, 46 states have enacted a full-year budget for fiscal 2021. 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. In addition, states continue to monitor developments at the federal level to see if additional federal aid will be provided, helping to lessen the need for more drastic cuts to essential services that would impact state residents and dampen the nation’s economic recovery. As noted in a recent NASBO blog post, states have begun taking initial steps to balance their budgets, including ... More

Download PDF State Fiscal Outlook: Pre- & Post-COVID-19 Today, NASBO released its Spring 2020 Fiscal Survey of States . In a typical year, this report reflects the fiscal health of state governments based on governors’ budget proposals for the upcoming fiscal year, and these proposals usually align closely with the expenditure and revenue plans ultimately adopted by states. However, this is not a typical year. The Spring 2020 Fiscal Survey reflects state fiscal conditions before the COVID-19 pandemic and its economic fallout, and therefore does not capture the current fiscal state of the states. The ... More