SLC Regional Resource | July 2020
On January 30, 2020, the World Health Organization's (WHO) International Health Regulations Emergency Committee declared the COVID-19 outbreak a public health emergency after it had spread to 18 countries. After reported cases continued to spread resulting in a new total of 114 afflicted countries, WHO Director-General Tedros Adhanom Ghebreyesus officially declared the outbreak a global pandemic on March 11, 2020.
The SLC region saw its first cases of COVID-19 in March 2020, leading every state in the region — apart from Arkansas and Oklahoma — to declare a stay-at-home order by April 7. Public health experts advised policymakers across the country to move quickly to enact social distancing precautions as a best practice response, based on concurrent international responses to the crisis. Facing a looming economic downturn and rising unemployment figures due to the pandemic and resulting shutdowns, state budget and revenue offices reported a steady decline in general fund collections beginning as early as April. As the source of more than 75 percent of revenue for most states, the decreases in income and sales taxes collected will impact budgets in FY20 and beyond. With the federal income tax filing date moved to July 15, most states had no choice but to follow suit — thereby shifting a significant portion of their fiscal year 2020 revenue to the beginning of fiscal year 2021 (FY21).
This SLC Regional Resource, current as of July 1, 2020, provides a brief account of the current and potential fiscal impacts of the COVID-19 pandemic on the SLC region. As this report demonstrates, many SLC states already have realized significant decreases in revenue collection for fiscal year 2020 (FY20), and can anticipate a continued decline into 2021 and, possibly, beyond as a result of this crisis and the uncertainty regarding the virus's trajectory. However, federal assistance and reserves stronger than prior to the 2007 Great Recession may mean that any short-term economic downturn can be weathered by SLC states, assuming the long-term forecast returns to normal.