Budget Blog

June 12, 2020 - News Flash

By Brian Sigritz posted 06-12-2020 03:39 PM

  

Alabama

Alabama’s governor signed the fiscal year 2021 budgets into law, including the $7.2 billion Education Trust Fund budget and $2.3 billion General Fund budget; both the education and general fund budgets are smaller than the governor’s original proposed budgets and do not include salary increases. The legislature voted to approve the governor’s amendment on spending federal CARES Act funding including $300 million to support citizens, businesses, nonprofits and faith-based organizations. The state collected $960 million in revenue in May, down almost 12 percent from the prior year; sales tax revenues were down 12.36 percent.

 

Alaska

Alaska lawmakers approved the governor’s distribution of CARES Act funding for statewide COVID-19 economic relief, including money for businesses, nonprofits and local communities impacted by the public health crisis. State residents will receive their Permanent Fund dividend checks early this year in an effort to combat economic hardship in the state. Low oil prices continue to take a toll on the state’s economy and revenues parallel the havoc created by the COVID-19 pandemic. The University of Alaska Board of Regents voted to cut or reduce more than 40 programs.

 

Arizona

Arizona’s governor distributed $441 million in federal coronavirus relief funds to local governments, earmarked for public safety and health costs. The state education agency has set up a task force to plan guidelines for reopening schools, while school leaders are saying the state will need to revise its funding formula, whereby funding is tied to student attendance. The governor is expected to call lawmakers for a special session related to coronavirus-related legislation and the state budget.

 

Arkansas

Arkansas general revenues in May dropped by $14.3 million compared to the prior year but exceeded the current forecast by $65.1 million; year to date, net available general revenues have dropped by $105.7 million compared to the prior year. The state created a $124.5 million program to assist small businesses, financed with federal funds. University of Arkansas System trustees voted to reduce budgets at most campuses, including freezing tuition and instituting hiring freezes. The state’s CARES Act Steering Committee released a set of funding recommendations including $109.6 million for hospitals, $5 million for state agencies and $250 million set aside in reserve.

 

California

California’s governor released in mid-May a revised budget proposal for fiscal 2021 to close a $54 billion shortfall resulting from the COVID-19 pandemic and economic crisis. The proposal cancels program expansions, draws down reserves, triggers $14 billion in additional budget cuts absent additional federal aid, and relies on other strategies to balance the budget. The legislature announced a budget agreement that would reduce the amount of trigger cuts to about $7 billion and delay them until October 1 to give Congress more time to approve federal aid. The legislature faces a June 15 deadline to pass a budget and is expected to vote on the budget on Monday.

 

Colorado

Colorado’s governor and legislative leadership announced the disbursement of $1.6 billion in federal CARES Act funds for medical and public health expenses, economic support efforts including education, local government public health measure compliance, and other COVID-19-related expenditures. Faced with a $3.3 billion shortfall, the Joint Budget Committee has developed a spending plan to cut 25 percent from the state’s $13 billion budget for fiscal 2021, including more than 15 percent from the state’s K-12 education budget. Lawmakers last week also unveiled a broad package of coronavirus relief legislation to include small business loans and grants, housing assistance, and expanded unemployment benefits.

Connecticut


Connecticut’s administration requested municipalities to report their pandemic-related costs and has set aside $75 million for the program from federal funds. The state’s comptroller is estimating a $620 million shortfall for fiscal 2020 due to economic damages from the coronavirus pandemic, a reduction from the previous estimate due to a timing change in Medicaid reimbursement. Negotiations with state employees to hold off on a scheduled 3.5 percent raise have failed so far to reach a deal. The state plans to borrow $300 million from the federal government to cover unemployment claims.

 

Delaware

Delaware’s governor is paring down his proposed fiscal 2021 budget request from January and plans to draw from a reserve fund, is no longer recommending pay raises for state employees, and is rescinding a proposal to contribute $233 million general fund cash for construction and road projects. Revenue estimates for the current year were down by $325 million since January for fiscal 2020 and by $294 million for fiscal 2021. The state received a $67 million grant from the Centers for Disease Control and Prevention for expanded testing capacity for COVID-19. Three bond rating agencies reaffirmed the state’s Triple A rating.

 

Florida

Florida’s state revenue was down $878.1 million in April from estimates, with sales tax revenues down 24.1 percent; however, revenues for the first quarter of the calendar year were up $202.4 million over estimates. Pending additional federal aid, the governor put on hold reviewing the $93.2 billion fiscal year 2021 budget approved by the legislature in March. The state requested $20.2 million in election funding from the federal government, part of the $400 million approved in the federal CARES Act. The Florida Board of Governors approved a blueprint for reopening the 12 public university campuses for the fall semester, with an expected mix of in-person and online instruction.


Georgia

Georgia’s revenue collections declined 10 percent in May with sales taxes down 13 percent and personal income taxes down 3 percent; the current year budget shortfall increased to $850 million. The governor notified agency heads that he is preparing an updated revenue estimate that will call for 11 percent across-the-board spending reductions in fiscal year 2021, smaller than the 14 percent previously anticipated. Agencies submitted proposals for the original 14 percent reduction, with many large agencies proposing two furlough days a month and a proposed $1.3 billion reduction in the state’s K-12 funding formula. The state issued a set of recommendations for reopening K-12 schools with a range of options that allow local officials to react to changing conditions.

 

Hawaii

Hawaii is now forecasting a $2.3 billion budget shortfall, with revenues expected to decline year-over-year by 7 percent in fiscal 2020 and by another 12 percent in fiscal 2021 due to the COVID-19 crisis. Earlier last month, lawmakers passed legislation to allocate federal relief funds and set aside money in the rainy day fund for potential use to shore up the state’s unemployment trust fund, as well as legislation to issue bonds, tap the rainy day fund’s prior balance, and other measures. The state’s unemployment rate has risen to 22.3 percent. The legislature expects to reconvene on June 22.

 

Idaho

Idaho’s governor announced a $200 million plan supported by federal Cares Act funds to cover local public safety costs and provide property tax relief. The governor also announced a plan to use $100 million in federal relief funds to offer one-time cash bonuses to residents who return to work. The governor outlined a plan to reduce public school funding by $99 million (5 percent) in fiscal 2021 to help school districts in their budget writing, and plans to issue an executive order after the new fiscal year begins to reduce general fund spending based on updated revenue projections.

 

Illinois

Illinois’ governor recently signed the fiscal 2021 budget that includes some reductions in operations, includes additional federal funds related to COVID-19, and allows for the borrowing of $5 billion from a Federal Reserve program. The governor noted that the state will address any financial gaps if a November ballot measure allowing for a graduated income tax does not pass, and if additional federal funds are not provided. Illinois became the first state to tap the Federal Reserve’s Municipal Liquidity Facility program when it announced plans to borrow $1.2 billion to help cope from revenue losses associated with the coronavirus. State revenues declined an additional $341 million in May and overall revenues are down $1.3 billion compared to the same time last year, although part of the decline is related to the shifting of the tax deadline to July 15; sales taxes experienced a 23 percent drop in May compared to May 2019.

 

Indiana

Indiana has instructed agencies to plan for 15 percent budget cuts in fiscal 2021 due to declining revenue associated with the impact of COVID-19; the governor noted that it is the first of likely several steps the state will take to reduce spending. Tax collections in May were 20 percent less than estimates and for the year revenues are nearly $1.2 billion below forecast. Indiana said that work is ongoing to determine how the state will use $2.1 billion in federal dollars from the CARES Act; earlier the governor appointed an Economic Relief and Recovery Team to help come up with a plan for the use of the funds.

 

Iowa

Iowa’s legislature returned to session to finalize a fiscal 2021 budget plan, after recessing in March due to COVID-19. The House recently agreed to a mostly status quo budget that stays below the Revenue Estimating Conference’s forecast for fiscal 2021 tax collections; the House has yet to reach agreement with the Senate on a budget. The Revenue Estimating Conference recently lowered its revenue projection for fiscal 2021 by $360 million less than a March estimate, and reduced its forecast for fiscal 2020 by $150 million. The governor noted that she will be transparent on the use of federal funds related to the coronavirus and has consulted with the legislature, local officials, and other organizations.

 

Kansas

Kansas’ legislature is unlikely to address an estimated $650 million budget shortfall, allowing the governor to take actions to balance the fiscal 2021 budget until the legislature reconvenes in January. The governor recently signed a COVID-19 emergency authority bill that grants the governor emergency powers through September 15, while also giving more say to the state legislature and county officials. The legislature is now not expected to consider Medicaid expansion until the 2021 session. May tax collections were down 20 percent compared to last year, however, they were above projections from a revised revenue forecast that was released in April.

 

Kentucky

Kentucky’s Consensus Forecasting Group predicted fiscal year 2020 general fund revenue would fall by $456.7 million, a lower budget shortfall than forecast at the end of April; this is a 4 percent drop from the budget enacted by lawmakers. General fund receipts fell $69 million, or 8.1 percent, in May compared to the prior year; the receipts were better than expected due to income tax withholding receipts that were supported by unemployment insurance benefits. The state’s Road Fund dropped by 33.4 percent, following a 30.1 percent drop in April. State agencies planned for a 12.5 percent spending cut for the remainder of FY 2020, and a freeze on hiring and discretionary spending was implemented.

Louisiana

Louisiana’s House Appropriations Committee has advanced a $33 billion fiscal year 2021 operating budget in a special session; the proposal largely follows recommendations made by the governor. The budget removes planned increases and uses $562 million in federal dollars and $90 million from the state’s rainy day fund to fill most of the $904 billion shortfall. Louisiana’s child welfare and food stamp agency, K-12 public school financing formula, and TOPS college tuition program would avoid reductions; public defenders would see a $7 million increase; and colleges would see a $22 million reduction. Lawmakers have also trimmed back the $800 million the governor had directed to local governments and directed $200 million of that funding to small business grants. Business tax breaks will also be considered in the special session.


Maine

Maine faces a $200 million revenue shortfall for fiscal 2020 that is expected to be covered by fund balances and reserve funds and the state could lose up to $525 million in revenue by mid-2021 in the economic slowdown. The state has held off on distributing money to entities such as local governments for expenses since the state needs more guidance on how to best allocate funds and may wait further in the event additional aid is coming. Credit ratings agencies have affirmed the state’s bond rating amid the coronavirus pandemic. Revenues in April were 47.8 below forecast due to the economic impact of COVID-19 and the shifting of the federal tax deadline.
 

Maryland


Maryland’s
Board of Public Workers approved $120 million in spending cuts for fiscal year 2020 as preliminary estimates show the state could collect between $925 million and $1.125 billion less in taxes by the end of June. Revenue estimates show the state could be missing out on between $2.5 and $4 billion per year by fiscal year 2022 if job losses, lost income and reduced consumer spending continue. The Transportation Trust Fund faces an estimated $550 million revenue shortfall in fiscal year 2020 and for fiscal year 2021 could see a decline of between $490 and $560 million. The governor vetoed a series of bills at the end of the legislative session, many of which increased spending in future years.

Massachusetts

Massachusetts’ preliminary May revenue collections totaled $1.7 billion, $320 million or 15.6 percent less than forecast, and $262 million or 13.1 percent less than the prior year. Year-to-date revenue collections through May totaled $24.8 billion, $1.7 billion or 6.5 percent less than the prior year, and $2.3 billion or 8.3 percent less than projected. Earlier, the administration filed a supplemental budget bill to authorize $1 billion in spending necessary to cover incurred and expected costs during the COVID-19 public health crisis. The administration is also planning to distribute up to $502 million from the Coronavirus Relief Fund to local cities and towns for eligible costs related to the COVID-19 response effort. The legislature approved a bill allowing the state treasurer to borrow money to cover a shortfall due to the delayed income tax deadline with funds repaid by June 30, 2021.

Michigan


Michigan is estimating that it will receive $3.2 billion less in revenue in fiscal 2020, and another $3 billion less in fiscal 2021; the state’s new fiscal year begins on October 1. The budget director noted that the state has already limited spending, instituted a hiring freeze, and furloughed workers, but will also have to take other actions to balance the budget. During a recent U.S. House hearing, the governor said that she appreciates the financial assistance and supplies provided to date by the federal government, but that more federal funding for states is needed. The legislature is considering a bill to allocate more than $1.2 billion in current federal coronavirus relief funding. The state’s prison population has declined sharply due to accelerated parole reviews, less intake from county jails, and fewer parolees being returned to prison for technical violations. Impacts from COVID-19 have caused a sharp decline in state transportation revenue.

 

Minnesota

Minnesota’s legislature is expected to return for a special session later in June to consider approving another round of COVID-19 related aid, and borrowing to fund construction projects, among other items. Earlier the governor signed a series of bills including ones raising the age for purchasing tobacco to 21, and permitting government officials to sign documents electronically during the COVID-19 pandemic. The governor’s office has begun to announce plans on how it will spend $1.9 billion in federal funds related to the coronavirus.

 Mississippi

Mississippi’s state economist told lawmakers the state is expected to collect $1.2 billion less in tax revenue by mid-2021 compared to pre-pandemic estimates and it could take until 2023 for the state’s economy to recover to pre-pandemic levels. Lawmakers approved a bipartisan bill distributing $300 million from federal CARES Act funds to small businesses. A bill to provide a $1,000 pay raise to most teachers and teachers assistants failed to pass the House after passing the Senate in February. The House unanimously voted to extend the legislative session for successive periods of thirty days until the end of the year, if needed, to address coronavirus health response and funding.

 

Missouri

Missouri’s governor announced an additional $209 million in budget cuts before the end of fiscal 2020, after already reducing spending by more than $220 million; $131 million of the new cuts will come from K-12 education and $41 million from higher education. The governor and other state officials also said that more cuts will be coming for fiscal 2021. Earlier, the legislature agreed on a fiscal 2021 budget that is approximately $700 million less than what the governor proposed in January. Other bills passed by the legislature this session included changes to the state’s medical marijuana program and allowing mail-in voting during the pandemic. Revenues in May declined 22 percent compared to last year and for the year revenues are down 7.4 percent compared to fiscal 2019. An Appeals Court allowed a vote on a ballot measure to expand Medicaid to move forward.

Montana

Montana’s governor announced additional federal coronavirus relief funding for small businesses, meat processors and local governments The governor talked about the state budget in a news conference last month, noting the state was starting to see revenue declines and that the budget office and state agencies would be taking steps to save on spending, while also pointing to the state’s historically strong fiscal condition prior to the pandemic. Budget officials also noted that the state, which does not have a broad sales tax and relies primarily on income tax revenue, will have a better picture of the budget after July income tax collections come in.

 

Nebraska

Nebraska’s governor said that the COVID-19 pandemic will likely lead to budget cuts and that people will need to adjust their expectations for property tax reform and a new business incentives package that were being considered. Revenue collections in April were 41 percent below forecast resulting from the economic impacts of the coronavirus and the shifting of the tax deadline to July 15. The state is also estimating that federal tax changes will reduce state tax revenue by $250 million over three years. The governor recently announced his plans for the management of federal coronavirus related aid targeting some funding to the expansion of broadband service in rural areas, workforce retraining and community services. The University of Nebraska has begun implementing cost-cutting measures including eliminating 20 positions.

 

Nevada

Nevada’s governor announced proposed budget cuts to help address the state’s expected $812 million shortfall for fiscal 2020. For fiscal 2021, the governor has asked state agencies to prepare for additional budget cuts of 5 percent on top of agency cuts of between 6 and 14 percent already proposed. The governor in May declared a State of Fiscal Emergency, allowing the governor and interim finance committee to tap the state’s rainy day fund, transferring the $401 million savings account monies to the state general fund. The state’s transportation agency was told it would need to prepare for $143 million in budget cuts this biennium due to declining highway fund revenues.

 

New Hampshire

New Hampshire is facing a shortfall of about $200 million for fiscal 2020 and about $300 million for fiscal 2021. The state has spent $6.2 million of its Long Term Care Stabilization Fund, providing 22,500 staff workers with an additional $300 a week in pay to help retain workers. The Senate plans to vote on a package of bills that would spend $180 million in federal grants in support of housing, unemployment, broadband access, child care and nursing home programs.

 

New Jersey

New Jersey’s governor announced plans to cut $1.3 billion in spending and use savings to help balance the fiscal 2020 budget. Earlier, the Treasury Department predicted that state revenues will fall $10.1 billion through the end of fiscal 2021. The state Assembly passed a measure sought by the governor for authority to seek $5 billion in bonds as officials work to close the revenue shortfall resulting from the COVID-19 pandemic. Medicaid enrollment was nine times higher between March and April 2020 than for the same period in 2019. The governor detailed a plan to expand coronavirus testing and assemble a contact tracing corps.

 

New Mexico

New Mexico’s governor announced a special legislative session beginning June 18 to address the state’s budget shortfall, estimated between $1.8 billion and $2.4 billion for fiscal 2021; the state is estimating revenues will fall short of projections for fiscal 2020 by between $368 million and $483 million. The special session will require a rewrite of the state’s $7.6 billion general fund budget for fiscal 2021, which had included planned pay increases for state employees and teachers.

New York


New York’s governor is holding back on further budget actions to address its shortfall to see whether the state receives additional federal aid; the state is facing a 14 percent drop in revenue due to the pandemic and in the absence of federal funding to offset this loss, is preparing a plan to reduce spending by more than $10 billion. The governor also said whether or not Congress and the administration approve additional federal aid will impact if state employee layoffs and furloughs are required. The legislature recently passed a series of coronavirus related bills. Earlier, the governor warned the legislature to keep the state’s fiscal challenges in mind when passing new legislation. Hospitals and nursing homes will be cut by an additional 0.5 percent to address a Medicaid budget deficit.  The governor said that state and local governments will pay for the death benefits of families of front-line workers in the state who died from COVID-19.

North Carolina

North Carolina is projected to collect $4 billion less in revenues over a two-year period compared to previous forecasts, with collections estimated to fall $1.6 billion below forecast for the current fiscal year and fall nearly $2.6 billion in fiscal year 2021. The Senate voted unanimously to allocate $300 million in federal CARES Act funds for additional state government expenses incurred due to the pandemic. The legislature resumed session in mid-May with priorities including addressing expected revenue shortfalls and education funding.

 

North Dakota

North Dakota’s April tax collections were down $39.8 million, or 14.4 percent, compared to forecast but revenues since the new two-year budget began on July 1 remain 3.8 percent ahead of projections. The state is also expecting to take in less revenue from oil royalties this year related to the COVID-19 pandemic. The North Dakota Emergency Commission has begun approving the use of federal coronavirus relief funds, including for the unemployment insurance trust fund. The governor said that the state will have to be creative when looking at ways to jump start the economy.

 

Ohio

Ohio is planning on cutting state employee pay the equivalent of 10 days, or 3.8 percent, for the state’s non-union employees to help address a $2.5 billion budget hole. Local school systems are beginning to develop plans on how to respond to a $300 million cut in state funding for schools. Tax collections for fiscal 2020 are now approximately $1 billion below estimates. The House approved a measure that includes distributing $350 million in CARES Act funds to local governments. The legislature also agreed to a plan to fund state construction projects. The governor announced that casinos and racinos can open later in June.

 

Oklahoma 

Oklahoma’s governor vetoed four fiscal year 2021 spending bills including the $7.7 billion general appropriations bill, which was followed by a legislative override of the vetoes. State revenue collections fell by 31.8 percent in April compared to the prior year, with the biggest drop being a 50.5 percent reduction in income tax collections as the filing deadline was shifted to July 15. The state notified the federal government it was withdrawing its proposal to expand Medicaid on July 1 due to a lack of state funding but is still pursuing a block-grant style expansion.

 

Oregon

Oregon is forecasting revenue losses of $2.7 billion in fiscal 2020-2021 and $4.4 billion in the fiscal 2022-2023 biennium compared to prior projections before the COVID-19 pandemic. Last month, the governor directed state agencies to prepare prioritized reduction plans of 17 percent as a planning exercise. A bipartisan legislative committee agreed on how to allocate $247 million in federal coronavirus relief funds, including for rental assistance, grants to rural hospitals and to child care providers, agricultural worker protection, mental health services, rural broadband upgrades, and assistance to small businesses for purchasing personal protective equipment.

 

Pennsylvania

Pennsylvania lawmakers sent a $25.8 billion interim spending plan to the governor that level funds most programs for another five months until the full fiscal impact of the pandemic is realized. The Independent Fiscal Office is predicting $4.8 billion in permanent revenue loss through June 2021 due to the coronavirus. Pennsylvania collected $2.1 billion in May general fund revenue, $439.7 million, or 17.3 percent, less than anticipated; fiscal year-to-date general fund collections through May totaled $29.6 billion, $2.6 billion, or 8.2 percent, below estimate. The Turnpike Commission will permanently lay off about 500 employees and maintain cashless fare collection amid deep revenue losses. 

 Rhode Island


Rhode Island is facing a $235 million deficit in fiscal 2020 based on actual spending from July through March that incorporates newly updated forecasts for revenue and social services; state revenue is now expected to be roughly $800 million lower in the current and next fiscal years than originally projected. The General Assembly will wait until July to complete work on the fiscal 2021 budget with the governor and legislative leaders agreeing to delay the adoption of the fiscal 2021 budget until Congress finalizes a relief package for the states. The state plans to distribute as much as $150 million of federal stimulus money to help hospitals.

 

South Carolina

South Carolina economists lowered the estimated revenue available for fiscal year 2021 from nearly $10.3 billion to less than $9.6 billion due to the pandemic and related economic conditions. Legislators passed a bill to keep the state government operating at current funding levels if a new budget is not passed by July 1; the bill also allocates $181.5 million to respond to the pandemic. Lawmakers paused the teachers’ yearly salary step increase and employer retirement contribution increase during the continuing resolution. The task force on spending federal CARES Act funding released its list of recommendations including $500 million to replenish the state’s unemployment trust fund, $160 million to add five school days for K-8 grades, and $100 million for high-speed rural internet.

 

South Dakota

South Dakota’s governor said that fiscal 2020 revenue is currently $5.6 million below what was estimated in February but that the state should be able to address it without calling legislators back for a special session in June; however, she said the long-term impact of the pandemic is yet to be seen. The governor also outlined her plans for using federal CARES Act funding calling for directing the funds toward health care, small businesses, education, and local governments, while also holding some back in case the federal government grants additional flexibilities for the funds. The governor earlier noted that she does not want to use the federal coronavirus aid to grow government.

 

Tennessee

Tennessee’s governor proposed an additional $284 million in budget cuts for fiscal year 2021, in addition to the $397 million in recurring costs removed from the budget in March. The administration directed state agencies to identify as much as 12 percent in spending cuts for the upcoming fiscal year, with plans due June 30. The state announced a $200 million coronavirus relief program for small businesses, funded by federal CARES Act monies. Tax collections in May were $184.6 million lower than the prior year, including a drop of $105.9 million in sales and use taxes, and overall tax collections were $197 million below forecasts.

 

Texas

Texas’ state share of sales tax collections fell 13.2 percent in May, the sharpest decline in a decade and the second consecutive month of sharp declines as revenues fell 9.3 percent in April. The governor and legislative leaders asked most state agencies and institutions of higher education to identify five percent in budget cuts for fiscal years 2020 and 2021, with plans due June 15. Legislators indicated they do not plan to tap into the state’s $8.5 billion uncommitted rainy day fund balance before next year’s regular session.

 

Utah

Utah’s legislative leaders last month have asked every state agency to develop budget reduction plans or “stress tests” with 2 percent, 5 percent, and 10 percent cuts. Appropriations subcommittees met to review recommendations from state agencies, including the state school board, and potential cuts include teacher layoffs and increased class sizes, reductions to foster care and child welfare services, public safety layoffs, and other spending cuts. Preliminary revenue updates show general and education fund revenues could be down as much as $600 million from the prior forecast for fiscal 2020, and between $592 million and $1.287 billion for fiscal 2021.

 Vermont

 
Vermont’s governor is asking state agencies to cut spending by 8 percent in his budget proposal that will cover the first quarter of fiscal 2021; revenues in fiscal 2021 are expected to fall by $374 million across all state funds, or about 15 percent, due to COVID-19. The House recently approved a budget that will fund state government for the first quarter of the upcoming fiscal year. April general fund revenues totaled $106.5 million, or 56.9 percent below their monthly target. The governor unveiled a $400 million economic relief package that aims to ease the strain of the COVID-19 crisis on businesses, agriculture, and housing.  All non-unionized faculty and staff at the University of Vermont will be subject to reductions in pay, depending on their salaries, starting July 1.

 

Virginia

Virginia’s governor signed the $135 billion two-year budget that pauses $2 billion in new spending initiatives while creating a coronavirus relief fund to assist with housing insecurity and small business loans. Local governments will receive approximately $644 million in federal CARES Act funding, with funding allocated based on population. Tax revenue fell by $700 million in April compared to the prior year, a 26.2 percent decline due to the pandemic and extension of the tax filing deadline to June 1. The state is committing $58 million in federal aid to expand contact tracing of positive COVID-19 cases. The governor released guidance for reopening colleges and K-12 schools.

 

Washington

Washington state’s revenue forecasting council released preliminary estimates that the state could lose $7 billion in state revenue through fiscal 2023 due to the COVID-19 pandemic and economic crisis, including $3.8 billion in the current biennium and $3.27 billion in the fiscal 2022-2023 biennium. Last month, the governor ordered a hiring freeze, and the state budget office directed agencies to prepare plans to cut their budgets by 15 percent. State agencies submitted their recommended reductions under this scenario, including potential layoffs, human service program cuts, and transportation project delays; all agency plans are now posted online.

 

West Virginia

West Virginia’s May revenue collections were nearly $38 million, or 11.26 percent, below estimates. Year-to-date General Revenue Fund tax collections are 5.59 percent below estimates. In May, the governor said he would call the legislature into special session in June if the state had not received new guidance from the U.S. Treasury Department that allowed the use of CARES Act coronavirus relief funds to offset lost revenues, or if additional federal aid had not been appropriated.

Wisconsin

Wisconsin’s governor announced plans for spending federal funds related to COVID-19 including on virus testing, contact tracing, supplies and resources, and preparing for a surge. The governor also announced $200 million in federal aid for localities. The state is experiencing a decline in gas tax revenues and vehicle and title registration fees due to the impact of the coronavirus. The University of Wisconsin System is examining spending cuts, borrowing money, and starting the school year early to help address funding challenges.

 

Wyoming 

Wyoming faces a projected $1.5 billion revenue shortfall, as the state grapples with the economic fallout of COVID-19 alongside falling oil prices and natural gas and coal production for the fiscal 2021-2022 biennium. The governor has directed agencies to prepare for a 20 percent cut to the state’s two-year budget, which are expected to lead to layoffs and program eliminations. Sales tax revenue declines of up to 30 percent are expected in fiscal 2021, and a general fund budget shortfall of $877 million through fiscal 2022 is projected.