Despite stronger revenues, states won’t rush to spend

US state and local government revenues are faring much better than initially feared, likely reducing the need for further significant spending cuts. Through the first nine months of 2020, state and local revenues were 2% higher than over the same period in 2019, despite tax revenues being 0.7% lower. We expect a tax revenue shortfall of 0.4% in 2020 and a 5% increase in 2021.

What you will learn:

  • Cautious outlays despite the revenue bounce
  • Spending cuts could drag on the recovery
  • Federal aid has helped buffer the Covid shock
  • More fiscal support is in doubt

Topics: United States, Markets, Coronavirus, US economy, States

Despite stronger revenues, states won’t rush to spend - iPad