Multistate Associates Blog States' Fiscal Health is Still Generally Positive (But Federal Funding Concerns Remain)

Several times a year, our tax team does a survey of each state's short-term fiscal outlook to determine if a state's revenues are relatively stable, or if it will likely face short-term fiscal challenges. Not much has changed since our February update. The majority of states still have a generally positive short-term fiscal outlook (34 states in total as of this month). Several states, however, are facing significant short-term challenges (7 states). We also have a category called "conditional" fiscal outlook, which means a state's revenue health could go either way, depending on certain current extenuating circumstances. As of March, nine states fall into this category. Federal funding and staffing cuts continue to be a concern for many state lawmakers, with unemployment insurance for terminated workers adding to state costs and the potential for increased funding for programs such as Medicaid and SNAP on the horizon.