From the Abstract: "We assess the Covid-19 [coronavirus disease 2019] pandemic's implications for state government sales and income tax revenues. We estimate that the economic declines implied by recent forecasts from the Congressional Budget Office will lead to a shortfall of roughly $106 billion in states' sales and income tax revenues for the 2021 fiscal year. This is equivalent to 0.5 percent of GDP [gross domestic product] and 11.5 percent of our pre-Covid sales and income tax projection. Additional tax shortfalls from the second quarter of 2020 may amount to roughly $42 billion. We discuss how these revenue declines fit into several pieces of the broader economic context. These include other revenues (e.g., university tuition and fees) that are also at risk, as well as assets (e.g., pension plan holdings) that are at risk. Further dimensions of context include support enacted through several pieces of federal legislation, as well as spending needs necessitated by the public health crisis itself."
AEI Economics Working Paper 2020-08; American Enterprise Institute Economics Working Paper 2020-08
2020 Jeffrey Clemens and Stan Veuger. Posted here with permission. Documents are for personal use only and not for commercial profit.
American Enterprise Institute: https://www.aei.org/