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1 Jared Walczak, State Forecasts Indicate $121 Billion 2-Year Tax Revenue Losses Compared to FY 2019 1 (2020)

handle is hein.taxfoundation/tfstfrcs0001 and id is 1 raw text is: State Forecasts Indicate $121 U T7ON Billion 2-Year Tax Revenue Losses Compared to FY 2019 FICA Jared Walczak Vice President of State Projects No. 718 July 2020 Key Findings Extrapolating from recently revised state revenue forecasts yields an estimated nationwide $121 billion decline in state tax collections across FYs 2020 and 2021 against a FY 2019 baseline, and $191 billion compared to initial tax revenue projections for those two years. These estimates are consistent with the results of other recent analyses, and, while representing significant losses, are at the lower end of many preliminary forecasts of the state revenue implications of the COVID-19 pandemic. All major taxes have been affected by the crisis, but for the current fiscal year, states expect income tax collections (both individual and corporate) to be further off the FY 2019 baseline than sales taxes, which may begin to stabilize as the sharp early contraction in consumer spending, at the outset of stay-at- home orders, gives way to somewhat more typical spending patterns. Although these numbers should be regarded as provisional, and no one can fully account for the possibility of subsequent economic shocks, they can help federal lawmakers formulate an appropriate response when designing any further package of state and local relief. The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. ©2020 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org