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September 25, 2024

What’s Next?

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

Pew

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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The State Revenue Wave �Measuring the pandemic’s impact

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

  • Unprecedented federal aid
  • Consumer spending shift
  • Record stock market gains

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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The post-pandemic revenue surge

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$152 billion

50-state revenue growth

January 2020 - December 2022 that may be temporary

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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One-time policy choices

  • Replenishing reserves
  • Extra pension payments
  • Taxpayer rebates
  • Paying off debt
  • Infrastructure projects

Permanent policy choices

  • Pay raises for state workers
  • Permanent tax cuts

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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Managing the surge

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State-by-state data�Comparison to pre-pandemic trend

Underperformed:

Maryland

On-trend:

Virginia

Outperformed:

Montana

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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The wave breaks

Fiscal 2023 marked the first revenue decline outside of a recession in more than 40 years

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9% decline

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State revenue picture�Nominal growth after 2 years of declines

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

Source: National Association of State Budget Officers Spring 2024 Survey

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State spending decline�Pulling back from large, one-time investments

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

Source: National Association of State Budget Officers Spring 2024 Survey

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What we’re watching�Education funding, EV policy are key issues for 2025

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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Undercurrents�

How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

  • Interest rate cuts
  • Public sector employment

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

Share of job growth

2023

2022

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates

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January

2025

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Liz Farmer �Officer | Fiscal 50

www.pewtrusts.org/fiscal50

lfarmer@pewtrusts.org

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How the Post-Pandemic Fiscal Rollercoaster Could Shape Future State Debates