U.S. Census Bureau > Quarterly Summary of State & Local Tax Revenue: Quarter Two

How Much Covid Relief Do States Need?

The fiscal crisis is not as dire as Democrats say, but it’s worse than Republicans claim.

By Karl W. Smith

Bloomberg.com

" . . .No one can know for sure what course the virus will take, or what state and local governments will need to do in response. Nonetheless, it seems highly implausible that they will face costs as high as Democrats expect.

Democratic fears were bolstered by a Census Bureau report last week that state tax revenues fell by 29% year-over-year in the second quarter of 2020. .  . Instead of looking forward, however, lawmakers should look back — at what has already been spent. Through the end of June, state and local governments had spent only 25% — roughly $35 billion — of the $139 billion they were allocated in the first relief package in March. And a few states have been accused of spending what little they have on projects and programs unrelated to the pandemic. . .

All that said, this is a fast-moving and uncertain crisis. Setting aside an additional $250 billion for state and local aid, roughly a third of Pelosi’s initial request, is prudent. Republicans ought to feel comfortable funding a buffer of that size without worrying too much that it will fuel spending binges through 2021. And Democrats can be confident that those funds will likely hold over state and local governments well into next year.

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Quarterly Summary of State & Local Tax Revenue: Quarter Two

September 2020

https://www.census.gov/en.html

  Table 1. National Totals of State and Local Tax Revenue, by Type of Tax 2020   [<1.0 MB]

  Table 2. National Totals of State Tax Revenue, by Type of Tax 2020   [<1.0 MB]

  Table 3: State Tax Collections by State and Type of Tax 2020   [<1.0 MB]

Last Revised: September 14, 2020