State budget takes $8.8 billion hit
Chief Economist Steve Lerch told the state’s Economic and Revenue Forecast Council last week that state revenues are expected to decline by a total of $8.8 billion relative to previous expectations over the next two budget cycles, and echoed Federal Reserve Chair Jerome Powell’s assertion that a full recovery is unlikely until the public is confident COVID-19 is brought under control.
Some lawmakers are proposing a capital gains tax, and are opposed to major cuts in state services that occurred in the last recession a decade ago. Others point out that even with a recession, revenue for this budget cycle is still higher than the past two years, and it’s not that we have a budget issue, but a spending problem. Lawmakers are expected to meet in a special session later this summer or in the fall.
Posted June 26, 2020