Revenue Forecasts Improve, but Uncertainty Remains for Many States

State revenue forecasts were dire at the beginning of the COVID-19 pandemic, but states have shown surprising resilience, and most states now have significantly improved forecasts. There is still, however, significant variability between states, in part due to how hard COVID affected their economy and how their tax system is structured. Still, by our count, at least 17 states will likely have stable revenue forecasts for FY 21. 

This information is rapidly changing, and it will continue to shift as states release more information through their budgeting process. The map below shows the likely fiscal situation for states in Fiscal Year 2021: stable, facing moderate challenges, or facing significant challenges. The determinations are based on the most recent revenue forecast from each state. 

States will likely see more changes to revenues and their economies as a result of many unanswered questions: vaccine timelines, whether the economy grows as strongly as predicted, and importantly, additional federal stimulus funds to both individuals and states. 

Joe Crosby recently presented this information to the Senate Presidents’ Forum. To read more about his presentation, visit their website. 

For more information on revenue forecasts released by states, please contact Morgan Scarboro.