Thursday, August 11, 2022
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State revenue loss not as bad as expected. But, as with pandemic, worse is coming


Happily for states, revenues for fiscal yr 2020 (which resulted in June in most states) got here in considerably higher than they anticipated. Our evaluation of Census information and state tax collections finds that revenues had been about 2 p.c under states’ pre-pandemic projections, which interprets into complete shortfalls of about $22 billion. That’s a lot decrease than appeared possible earlier this yr when unemployment charges had been rising very quickly and main financial forecasters had been projecting charges to hit Melancholy-era ranges. It’s additionally a lot lower than the historic relationship between unemployment and state revenues, primarily as a result of this recession has been concentrated amongst lower-income staff (who pay much less in taxes) and since federal help, like expanded unemployment advantages, boosted staff’ earnings and buying energy within the pandemic’s early months.

A lot of that federal help, although, is now expired or spent, and states nonetheless face significantly decrease revenues, with unemployment excessive and enterprise exercise nonetheless down. Within the final couple of months, states have grown modestly extra optimistic concerning the present fiscal yr however stay pessimistic about subsequent yr. States’ adjusted estimates counsel that, within the absence of additional federal assist, shortfalls will complete about 11 p.c of their budgets in fiscal yr 2021 and 10 p.c in 2022, which begins subsequent July in most states. Plus, states face elevated prices as a result of increased enrollment in Medicaid and different packages. Together with these increased prices, states’ personal estimates counsel shortfalls via fiscal yr 2022 that complete about $305 billion.

These estimates might simply show too optimistic. […]

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“We’re simply a complicated breed of monkeys on a minor planet of a really common star. However we are able to perceive the universe. That makes us one thing very particular.” ~~Stephen Hawking (1988)

TWEET OF THE DAY

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BLAST FROM THE PAST

At Each day Kos on this date in 2009—On the issue of retaining geese in a row:

Why has it traditionally been so powerful to maintain Home progressives standing sturdy and utilizing the leverage of their voting bloc to extract concessions on essential laws the best way Blue Canine have been in a position to?

A part of the reason being that progressive elected officers occupy a portion of the political spectrum that typically leaves them insulated from most accountability to progressive voters. In different phrases, they’re protected to some extent by the “the place else are they gonna go?” issue.

That is why progressive grassroots activists have come to anticipate their elected officers to finally and in most each case, find yourself making the “greatest deal we might get” argument in assist of their final abandonment of rules clearly said within the earlier phases of the method. 





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