Alabama will receive $4.043 billion in direct aid from the state and local government funding provided in the American Rescue Plan Act (ARPA). The state Senate approved a $7.6 billion fiscal year 2022 budget for the Education Trust Fund, which includes a 2 percent pay raise for all school employees and additional funding for math and science teachers. The state submitted a plan to the federal government for pandemic Electronic Benefit Transfer (EBT) payments for children in remote learning, which could result in benefits for 470,000 children totaling $400 million.
Alaska Senate committee lawmakers approved the governor’s plan to borrow more than $300 million for state construction projects. Meanwhile, lawmakers are awaiting guidance on the eligible uses of federal aid from the ARPA, and how this might interact with state infrastructure spending and the state budget more broadly. Alaska’s revised revenue forecast last month showed the state is expected to receive $460 million more in oil tax revenue in fiscal 2022 than predicted last fall. House Transportation Committee lawmakers advanced a bill to double the state’s gas tax, unchanged since 1970, from 8 cents to 16 cents per gallon. The state’s chief economist does not expect the state tourism industry to fully recover until 2024.
Arizona’s governor is looking to lawmakers or the state judicial system to challenge the new 3.5 percent tax surcharge approved by voters last fall to boost education funding. One bill under consideration would create a new tax category to permit small business owners to avoid paying the surcharge. The governor said that the ARPA provision prohibiting use of funds to offset tax cuts is not applicable to and will not interfere with the state’s plans to pass an income tax reduction. The House Education Committee head is urging the state education agency to distribute federal funds to schools to prevent teacher layoffs announced by some districts in response to expected state aid declines due to lower enrollment.
Arkansas’ general revenue collections in March were 0.1 percent lower compared to the prior year but were 9.3 percent ahead of the state’s forecast; the year-to-date surplus is $549.9 million. The state will receive $1.7 billion and local governments will receive $1 billion from ARPA’s state and local recovery funds, while public schools will receive more than $1.2 billion, for a total of nearly $4 billion. A state panel endorsed the allocation of $12.2 million in CARES Act funds to the Department of Commerce to assist with unemployment benefits processing; the state has $36.2 million in unallocated relief funds. Legislators sent a bill retooling the state’s private-option Medicaid expansion program, including elimination of the work requirement, to the governor.
California lawmakers passed legislation to expand paid sick leave to more workers. The federal ARPA package will provide $26 billion in fiscal recovery funds to state government, in addition to other various pots of money. While the state’s revenue projections have improved in recent months, state finance officials expect it will take two years or longer for the state to return to pre-pandemic employment levels; the state’s jobless rate in February was at 8.5 percent, compared to 4.3 percent in February 2020. Some school districts are using state incentive funding to provide bonuses to teachers for reopening schools..
Colorado’s latest revenue forecast from the state budget office shows general fund revenues are now expected to exceed December projections by $425 million for fiscal 2021 and by $390 million for fiscal 2022, though economic indicators remain below pre-pandemic levels and unemployment is still elevated, especially among low-wage earners. Legislative economists also presented a similar revenue forecast to the Joint Budget Committee. Lawmakers unveiled a plan to raise nearly $4 billion in transportation funding over the next decade. The governor is going on a statewide tour to gather input on how to spend the state’s portion of ARPA funds.
Connecticut is projecting an operating surplus of $180.6 million, an improvement of $49 million from February due mainly to revised revenue trends. The projected budget reserve fund balance at the end of the fiscal year is expected to reach $3.75 billion, or 18.7 percent of current net general fund appropriations. One of the three major credit rating agencies announced it had upgraded the state’s general obligation’s bond rating, the first time the state has seen an upgrade since 2001. The House unanimously approved a bill to ensure the General Assembly has an equal voice with the governor in allocating up to more than $2.6 billion in new federal pandemic relief. The state could see between 5,000 and 6,000 retirements from executive branch agencies next year, with potentially between $600 million and $900 million savings in a reorganization.
Delaware’s forecasting panel increased its revenue forecast for the current year by more than $160 million compared to its December estimate and increased the general fund forecast for fiscal 2022 by $148 million. The increases are due largely to higher estimates for personal income taxes, corporate income taxes, and corporate franchise taxes. The panel also updated its expenditure forecast, which shows expenses for next fiscal year expected to grow by more than $320 million compared to the current year, including a $100 million increase in Medicaid costs. The state released its first benchmark trend report summarizing health care spending and quality with data collected for calendar year 2019. The state continues to maintain its AAA bond rating.
Florida economists, citing consumer spending and corporate earnings, added approximately $2 billion to the state’s revenue forecast, with $1.5 billion more than anticipated in the current fiscal year and $550.8 million next year. The state Senate unanimously passed a fiscal year 2022 budget that allocates $95 billion, which needs to be reconciled with the $97 billion plan being considered by the House. The governor proposed plans for spending the $4.1 billion allocated to the state under ARPA, including infrastructure projects, addressing sea level rise, fixing the unemployment system, behavioral health services, and bonuses for first responders. The state Senate approved a bill to collect sales taxes on out-of-state online retailers, with a projected $1 billion in collected funds allocated to replenish the state’s unemployment trust fund.
Georgia legislators agreed to a $27.2 billion budget for fiscal year 2022 that includes additional funding for schools, health care and roads along with pay raises for high turnover positions, a $40 million rural innovation fund and $10 million to expand rural broadband. The governor signed a bill that reduces overall income taxes by an estimated $140 million by increasing the standard deduction for individuals (from $4,600 to $5,400) and married couples filing jointly (from $6,000 to $7,100). The state is sending out $230 million in one-time “retention bonuses” to teachers and other staff, funded from federal stimulus funds. The governor announced he will set up committees to review applications to spend the $4.6 billion expected from ARPA and the budget office will administer a grant application process.
Hawaii House lawmakers passed a two-year budget avoiding deep spending cuts, largely through the use of federal assistance. The House Finance Committee appropriated all state fiscal recovery funds from ARPA ($1.6 billion) to be spent over the next two fiscal years, including $700 million to repay the U.S. Department of Labor for an unemployment insurance trust fund loan. Last month the governor announced that the state would not need to furlough or lay off workers due to the passage of ARPA. The budget bill passed by the state House eliminates 800 vacant government positions.
Idaho’s legislature returned to session this week to consider various budget bills, legislation on early education and full-day kindergarten, and other items. The governor last month signed 31 bills into law, including numerous appropriation bills. The state House approved a bill to reduce ongoing income taxes by $169 million and a one-time tax rebate of $220 million, with most of the reductions covered with money from the state’s tax relief fund, which collects sales taxes from online purchases. The state House also passed legislation to change how public health is funded and reduce the state’s indigent care and catastrophic health program. The governor announced that the state will be deliberative about how it spends its portion of ARPA funds and that the money will not be used to create ongoing programs.
Illinois’ legislature passed a healthcare bill that is aimed at eliminating race-based and other inequities in the state's health care system, and includes provisions to expand medical services available to low-income residents and residents of color. The governor’s fiscal 2022 budget proposal addresses a projected deficit through curtailing spending by $400 million and raising $1 billion in taxes through eliminating corporate loopholes. The governor has asked school districts to carefully target $7 billion in federal funds they will soon receive and help address students’ learning loss from the pandemic.
Indiana’s Senate unveiled a two-year budget proposal that includes increased K-12 funding as well as federal dollars for mental health treatment; the budget does not include a proposed cigarette tax hike. An influx of additional federal dollars has altered previous budget plans for the next biennium. The governor recently signed a police reform bill and legislation ensuring that school districts receive full funding regardless if students are in-person or virtual. The legislature approved a bill allowing it the ability to call itself into emergency session to consider a state of emergency declaration or to undo the governor’s emergency orders; the governor is expected to veto the bill.
Iowa’s Senate has begun considering budget bills for fiscal 2022 with a goal of adjourning by April 30; the Senate previously called for a fiscal 2022 target of $7.999 billion for state spending but that figure may go higher as they negotiate with the House and consider the governor’s priorities. The Senate recently passed a bill that would make changes to the state’s mental health system, phase out property tax replacements to local governments, make income tax cuts beginning in 2023, change school funding, and alter various state tax credit programs. The legislature approved a broadband grant bill in an attempt to boost internet access in rural areas. The state opened a new $195 million rental assistance program. The state’s Revenue Estimating Conference increased its revenue projection for fiscal 2022 to $8.4 billion from a $8.3 billion December forecast.
Kansas legislators are attempting to tie a school choice measure with a proposal to provide $5.2 billion in state aid to public school districts for the 2021-22 school year. The House is considering a tax measure that includes $130 million in tax cuts and $35 million in new taxes, a smaller package than the Senate’s version. The state is estimating that it will receive approximately $360 million less in tax revenue over the next three years due to a change in federal policies on COVID-19 relief for businesses. It appears uncertain if the legislature will legalize sports betting this year. The governor signed a measure rewriting Kansas laws for managing the coronavirus pandemic and future emergencies.
Kentucky’s governor signed bills appropriating ARPA funds;.$250 million was directed toward clean water projections, $575 million to repayment of a federal unemployment insurance loan, and $300 million toward broadband expansion. A proposal to increase the gas tax by 10 cents did not make it out of committee before the legislative session ended. Measures passed in the 30-day session include funding for all-day kindergarten for the 2021-2022 school year; liability protections from coronavirus-related lawsuits for businesses and health care facilities; and $25 million in tax credits for education opportunity accounts that can be used for private school tuition.
Louisiana begins its legislative session on April 12, amid discussions of how to spend ARPA funding. Replenishing the unemployment trust fund is a top priority of the governor. Other priorities are water infrastructure, to support the tourism industry, and broadband projects to better connect public school students. Others are advocating for transportation infrastructure spending. Public schools will receive $2.6 billion in ARPA funds. State education leaders are planning for a “robust” full-day summer school to address learning loss. The governor announced $163 million in federal funding for 15 state projects and programs to reduce flood risk for communities throughout Louisiana.
Maine’s legislature began voting on the $8.3 billion biennial budget for fiscal 2022-2023 with ongoing work on a separate, supplemental budget that will be needed with changing tax revenues and anticipated receipt of more than $1 billion in federal pandemic relief aid. The governor signed a supplemental budget that includes provisions to eliminate state taxes on the federal Paycheck Protection Program loans and exempt the first $10,200 of federal unemployment benefits received last year from state income taxes. The legislature is considering a proposal to expand career and technical education opportunities in the state. The governor signed an executive order to accelerate progress in reducing greenhouse gas emissions from transportation.
Maryland lawmakers outlined a plan for spending an estimated $3.9 billion in federal aid from ARPA, including $300 million for broadband, $500 million for construction projects, $1.1 billion to defray the cost of unemployment insurance, and extended cash benefits through the TANF program. State casinos raised a record $169.2 million in March, an increase of about $5.9 million over the previous record set in March 2019; revenue to the state totaled $71 million. The General Assembly approved a package of police accountability bills that includes a statewide use-of-force policy, a ban on police departments acquiring surplus military equipment, and restrictions on use of no-knock warrants.
Massachusetts’ preliminary revenue collections for March totaled $3.061 billion, which is $402 million or 15.1 percent more than the prior year and $648 million or 26.8 percent more than benchmark. Fiscal 2021 year-to-date collections totaled approximately $22.6 billion, which is $1.5 billion or 7.2 percent more than the prior year. The governor plans to sign a climate change bill that includes creating a net-zero greenhouse gas emission limit by 2050. The governor joined forces with Connecticut’s governor to advocate similar legislative proposals for curbing prescription drug costs, plans that would financially penalize drug manufacturers for excessive price increases. The state is planning to launch a new strategy to bring COVID-19 vaccine shots to some of the state’s hardest hit areas by using mobile and pop-up clinics.
Michigan’s governor vetoed $652 million in COVID-19 spending citing problems in the bill and a lack of negotiation. Communities in Michigan are awaiting greater clarity on the allowable use of ARPA funds. The Michigan Supreme Court declined a request for a new hearing on a case that resulted in allowing public funding for non-public schools. The state launched a $622 million COVID rental aid program to avoid evictions. Michigan is also set to receive $90 million for COVID-19 vaccine programs.
Minnesota’s governor released a revised state budget proposal that accounts for February’s improved revenue outlook; the revised budget includes additional investments to support working families, ensures students catch up on learning, and helps small businesses stay afloat while also maintaining a full state savings account by restoring $491 million to the budget reserve. The House has begun considering its version of the budget which calls for more spending on education and recovery for those most affected by the pandemic while increasing taxes on wealthy residents and large companies. During his State of the State address, the governor said better days have arrived and normalcy is on the horizon. The legislature is considering a bipartisan bill to reduce prescription drug costs.
Mississippi’s governor signed a bill authorizing a $1,000 pay raise for most teachers and a $1,100 pay raise for those in the early years of their career. Legislators worked to complete the fiscal year 2022 budget that may include a 3 percent pay raise for state employees, a 1 percent pay raise for higher education, and $23 million to cover the increased cost of state employees’ health insurance. Lawmakers ended the 2021 session without taking action on a proposal to revamp the state’s tax structure by phasing out the income tax, reducing the grocery tax, increasing the sales tax on most items and increasing several other taxes.
Missouri’s House gave final approval to a $34.1 billion operating budget for fiscal 2022, but did not include funding for voter approved Medicaid expansion instead directing the funding to other areas. The governor included funding for Medicaid expansion in his budget noting that while he did not support it, the people voted for it. The legislature is considering a plan to let voters decide if they want to scrap the collection of personal property taxes. A Senate committee advanced a bill that would allow parents to enroll their children in any school district in the state. The state is planning to put half of unspent federal aid into the unemployment fund. The Attorney General is suing the U.S. Treasury over tax cut provisions in ARPA.
Montana’s House passed a $12.6 billion budget, which represents a $418 million reduction from the budget proposed by the governor. The House passed a bill outlining how the state will spend roughly $2 billion in ARPA funds, allocating money for water projects, broadband, schools, grants to businesses, housing assistance, and health and human services programs. The measure also has provisions for how the governor’s budget director would need to submit any changes above a certain threshold to the legislative finance committee for review. House lawmakers passed several bills to implement legal recreational marijuana, with retail expected to commence in March 2022. A bill advanced in the Senate to overhaul and reduce state income taxes.
Nebraska is expected to receive $1.2 billion in funding from the ARPA, along with $566 million for K-12, $211 million for universities, and $685 million for localities. The state has expressed concerns regarding tax cut provisions in the legislation. A budget bill being considered by the legislature would devote more than $1.45 billion to direct property tax relief over two years. The governor has expressed his opposition to bills being considered in the legislature that would permit electronic Keno games and allow a state takeover of Omaha Public Schools' troubled pension fund. The governor is also encouraging COVID-19 vaccinations as hospitalizations rise.
Nevada’s governor and legislative leaders unveiled a broad framework for how the state plans to spend ARPA funds on four tiered priorities. State legislative finance committees began closing budgets to fund the operation of state government in late March; the second half of the legislative session will primarily focus on the state budget. Lawmakers are also looking to overhaul the state’s 50-year-old K-12 funding formula this session, rather than take a phased approach recommended by the governor. A bill was introduced in the legislature late last month to create a new, separate governing body for the state’s community colleges.
New Hampshire’s revenues for March were $701 million, which was $24.6 million, or 3.6 percent more than estimated and revenues through March were $2.03 billion, $127.5 million, or 6.7 percent above forecast. The state’s jobless rate dropped slightly to 3.3 percent in February, the lowest unemployment rate since the pandemic began and one of the lowest rates in the nation. The state is considering a bill that would require the Department of Education to compare the average daily membership numbers for each district from both the 2019-20 and 2020-21 school years, and use whichever number is larger to calculate funding for school year 2021-22, to address concerns about a drop in school enrollment. The House passed a two-year $13 billion budget that removed several of the governor’s budget priorities.
New Jersey’s February revenue collections for the major taxes totaled $2.743 billion, up $189 million, or 7.4 percent, over last February. Fiscal year-to-date, total revenue collections of $21.493 billion are up $982.3 million, or 4.8 percent above the prior year. The Treasurer provided information on where federal funds had been allocated with the largest amount of funds at $15 billion dedicated to unemployment insurance programs. Funds from the Coronavirus Relief Fund included $830 million that went to law enforcement and public health measures. The governor defended earlier borrowing $4 billion saying that the state made the decision with the best information it had at the time.
New Mexico’s legislature adjourned after approving an annual budget calling for $7.4 billion in general fund spending for fiscal 2022, a nearly 5 percent increase, which boosts funding for public education and employee compensation and provides money for road projects and grants for businesses affected by the pandemic. The budget also appropriated more than $1 billion in federal ARPA funds, including $600 million for replenishing the state’s unemployment trust fund, $200 million for road repairs and construction, and other spending items, as well as $85 million to supplant proposed state spending on broadband. The governor signed a bill expanding two tax breaks for low-income workers in the state.
New York’s leaders announced they had reached an agreement on a $212 billion state budget that includes tax increases on the wealthy, as well as substantial relief for renters, and business owners hit hardest by the coronavirus. The governor signed a bill to legalize recreational marijuana for all adults over the age of 21 and the state is expected to generate $350 million in tax revenue annually and potentially create 30,000 to 60,000 jobs. The state recently issued $634 million of voter-approved general obligation bonds to finance a variety of critical projects as well as to refinance prior bonds, achieving $50 million in savings. Tax collections through February were $758 million higher than forecast.
North Carolina’s governor released a biennial budget that proposes spending $27.4 billion in fiscal 2022 and $28.5 billion in fiscal 2023 and includes an average pay raise of 10 percent for K-12 teachers, a 5 percent pay raise for state employees, and expands Medicaid. The governor signed a bill allocating $1.7 billion in COVID-19 relief for higher education, emergency food assistance, congregate and home-delivered meals, and coronavirus testing and tracing. Lawmakers announced compromise language on returning additional students to in-person learning while the General Assembly unanimously approved a bill requiring school districts to offer a summer school program to address learning loss during the pandemic.
North Dakota’s legislature is currently considering the budget for the next two years, which is now being altered by improved tax collection estimates and additional federal aid. The Senate rejected a bill that would have raised the state’s gas tax by 3 cents per gallon and legislation to legalize and tax recreational marijuana. The legislature is also considering a bill to increase their pay. The governor recently vetoed a bill that would have allowed the legislature to convene in December of even-numbered years to consider and vote on legislation.
Ohio’s governor signed into law the state’s transportation budget for the next two years providing funding for roads, highways, and public transit. Ohio’s state and local governments are anticipating receiving approximately $11.2 billion from ARPA including $5.6 billion for the state, $274 million for state capital projects, $2.2 billion to large cities, $815 million for smaller cities and villages, and $2.3 billion to counties; questions remain on how townships will be treated. The Senate recently approved spending $920 million in prior coronavirus relief funds. The legislature continues to consider legalizing sports betting. The legislature also overrode the governor’s veto of a measure limiting the governor’s coronavirus emergency powers.
Oklahoma’s governor signed a bill that would base school funding on the enrollment count from the prior school year instead of the highest enrollment count from the two preceding years and allow districts to carry over additional money from year to year in their general fund. The House approved plans to phase out the corporate income tax over five years and lower the personal income tax for all income levels, with opponents concerned over the availability of future funding for education. Lawmakers are studying the impact of additional federal funds for Medicaid due to the increased federal match during the pandemic public health emergency and additional increase from the state’s upcoming expansion of Medicaid.
Oregon’s legislature is considering additional spending for the current biennium as part of its “rebalance” process, including $250 million to support summer school and childcare, $20 million to help open centers around the state that would serve the homeless, and $5 million in wildfire relief for localities; these additional funds would be offset by canceling more than $300 million in unused general fund spending authority available to the legislative emergency board. The governor announced a 10-point economic plan to guide decisions on how to use ARPA funds to maximize recovery and address disparities exacerbated by the pandemic.
Pennsylvania collected $4.8 billion in general fund revenue in March, which was $378.2 million, or 8.5 percent, more than anticipated. Fiscal year-to-date general fund collections total $28.7 billion, which is $1.3 billion, or 4.7 percent, above estimate. Casino revenues in February came in at $301.9 million, a decrease of $2.36 million, or less than 1 percent, from the $304.3 million posted during the same period last year. Work has begun on finding new ways to raise more money for road and bridge projects and allow the state to phase out its gas tax. Pennsylvania schools are anticipating nearly $5 billion in federal COVID-19 aid.
Rhode Island’s governor released his proposed $11.2 billion budget for fiscal 2022 that includes continuing to provide two years of free tuition at the Community College and continuing the car-tax phaseout. The budget proposal includes additional revenue by taxing larger Paycheck Protection Program loans that have been forgiven, as well as by increasing beach fees and by legalizing recreational marijuana. The Department of Revenue sent out a news release explaining that the state’s tax law is remaining the same, and unemployment benefits will be taxed the same as always. The governor expressed concerns about a proposed climate change bill being considered by the legislature.
South Carolina legislators began work on the fiscal year 2022 budget, noting provisions such as a $50 million state disaster relief fund, $30 million to improve broadband internet, $21 million to help the tourism industry, and annual pay raises for teachers. The state’s transportation department will use roughly $140 million in federal COVID-19 aid to pay off debt ahead of schedule and free up resources for additional projects. A waiver to the federal Department of Education to conduct spring student assessments online was denied. The state’s requirement for work searches for unemployed residents to continue jobless benefits restarts April 18.
South Dakota is expecting to receive approximately $1.8 billion from ARPA with $978 million distributed from the new act’s state fiscal recovery fund. South Dakota has joined other state’s in questioning the measure’s tax cut provisions. A measure that legalizes medicinal marijuana will become law on July 1 after legislators failed to come up with a compromise. A group continues to push Medicaid expansion and is hoping to delay a new measure that would require 60 percent voter approval for any citizen-initiated law or amendment that would cost the state $10 million over five years. The governor signed a measure that will provide $100 million to increase broadband in rural areas.
Tennessee tax revenues for February outpaced prior year revenues by $112.7 million and were $190.9 million more than the budgeted estimate; year-to-date revenues were $1.3 billion more than the budgeted estimate. The governor reintroduced legislation to fund a $250 million Mental Health Trust Fund that would provide mental health services for school-aged children. The House passed a bill exempting COVID-19 relief payments received between March 1, 2020 and December 31, 2021 from the state’s excise taxes, allowing federal CARES Act and other funds to be tax deductible, costing approximately $9 million over the next two fiscal years.
Texas’ state Senate unanimously approved a $250.7 billion, two-year budget that would spend $117.9 billion of state general purpose revenue on priorities including K-12 education, property tax cuts, border security, mental health, and the teacher retirement system. The budget does not include more than $35 billion in federal COVID-19 relief as lawmakers await guidance on timing and eligible uses of the funds. The state is working to distribute $1.3 billion in federal funding for rent relief as the state Supreme Court allowed an emergency order on evictions to expire.
Utah’s governor signed the final budget bills into law last month, granting approval to the state’s $23 billion budget for fiscal 2022. Federal stimulus, a diverse economy, and expansive telecommuting were among the factors that analysts say contributed to the state’s relatively strong economic performance and low unemployment rate. The state will receive $1.5 billion in state fiscal recovery funds under ARPA; the legislature will need to hold a special session, likely in April or May, to formally accept the money. The governor issued a state of emergency last month due to drought conditions.
Vermont’s House approved a nearly $7 billion budget bill that invests Covid-19 federal relief dollars to make major investments in infrastructure, economic development and the state’s pandemic response. The Senate approved a $104 million coronavirus relief package, adding $20 million in spending to the version passed by the House. The House gave final approval to a plan to spend $150 million in anticipated federal funding to expand broadband internet service across the state. The Department of Vermont Health Access likely will see a surge in interest in its offerings, with the expanded subsidies offered in the ARPA for health insurance under the Affordable Care Act. The governor presented a plan to spend $1 billion of federal Covid-19 aid on major investments in broadband expansion, affordable housing and initiatives to address climate change over the course of the next four years.
Virginia’s governor proposed 18 amendments to the budget approved by the General Assembly which address issues including increased executive branch flexibility on federal funds and extending the corporate income tax reporting date from June 1 to July 1. The legislature approved a bill making it legal for adults to possess up to one ounce of marijuana on July 1, nearly three years earlier than under previous legislation. The governor signed bills extending certain tenant protections until July 1, 2022 and establishing the Commonwealth Health Reinsurance Program. The governor issued $6 million in grants funded through the Housing Trust Fund to projects designed to reduce homelessness.
Washington’s updated revenue forecast shows projected collections for the fiscal 2022-2023 biennium total $56.6 billion, $1.9 billion above the previous forecast; projections for the current fiscal 2020-2021 biennium are now $52.3 billion, $1.3 billion higher than expected. The state government will receive $4.25 billion in fiscal recovery funds from ARPA. The House released and passed a biennial operating budget proposal that would spend roughly $59 billion in state funds, and also spend $2.2 billion from ARPA on business, food and rental assistance, unemployment insurance and other areas. The Senate passed a similar operating budget. Both chambers’ bills propose draining the rainy day fund for one-time COVID-19 costs and include a capital gains tax.
West Virginia state senators worked on budget bill amendments that would restore major budget cuts proposed in the initial Senate plan for West Virginia University, Marshall University, and the Educational Broadcasting Authority. As drafted, the amendment would cut the programs by the 1.5 percent the Senate is requiring of all state agencies and offices. In addition, the initial proposal for an 8.5 percent sales tax would be reduced to 8 percent. Both Senate and House budget proposals cut more than $80 million in spending from the governor’s proposed budget on the assumption income tax cuts will reduce revenue. A bill created an intermediate court system has passed the House of Delegates; House changes will be taken up by the Senate.
Wisconsin state and local governments are projected to receive nearly $6 billion from ARPA. The governor has called for spending $2.5 billion of the federal funds on the state’s economic recovery including broadband expansion and businesses; the governor also vetoed a measure to give the legislature control over federal coronavirus relief spending. Some in the legislature have called on using federal aid for property tax relief as well as broadband. The state recently announced an additional $46 million in grants for small businesses. Wisconsin could start losing about $50 million per month in federal emergency funding for food stamps if state lawmakers do not replace an emergency declaration struck down by the Wisconsin Supreme Court. The state is partnering with 18F inside the federal General Services Administration to update its unemployment insurance computer system.
Wyoming’s governor signed the state’s supplemental budget for the fiscal 2021-2022 biennium into law, reducing state spending by $430 million and eliminating 324 state positions; some funding reductions proposed by the governor were able to be restored due to an improved revenue outlook. The two legislative chambers were unable to reach a compromise to address the state’s $300 million education funding shortfall. A state report shows a rebounding economy compared to earlier in the pandemic, but also indications of weakness compared to pre-pandemic measures.