NCSL Fiscal Briefs

8/22/2022

Fiscal Briefs

NCSL Fiscal Briefs are snapshots of timely state budget and tax issues. Check back monthly for the latest brief compiled by NCSL’s Fiscal Affairs Team.

September 2022
budget surplus

State Fiscal Conditions are Strong, but Uncertainty Looms

State fiscal conditions remain strong into fiscal year 2023. States expect revenue growth to continue, but at a slower pace than FY 2022 on average. Despite strong fiscal conditions, uncertainty in the overall U.S. economy, inflation, and other factors have states preparing for a potential recession.

August 2022
budget surplus

Update on State Cannabis Taxation

For the states that have joined the legal cannabis bandwagon, the decision paid off through the
pandemic as revenues experienced consistent growth. In many states, tax collections from cannabis are
outpacing alcohol collections, and in a few cases, tobacco tax collections as well. However, according to
officials in states like Colorado and California, tax revenues have flattened or slightly declined in FY 2022,
as a pandemic-fueled spike in consumption returned to normal.

July 2022
budget surplus

States Pursue Tax Relief in 2022

With most state budgets in strong, stable position, tax relief has been the most prominent tax policy trend in 2022. This brief reviews the most significant tax cut enactments to date.

June 2022
Travel

Travel is Taxing in More Ways Than One

Summer is here. The arrival of June officially kicks off the season with longer days and warmer weather. For many people that also means it’s time to pack up the family and head out on the annual ritual known as “summer vacation”. And two years into a global pandemic, the summer of 2022 is shaping up to be big for tourism. That also means additional revenues for state governments that levy taxes on services that target tourists, such as short-term accommodations and car rentals.

May 2022
Empty Shelf

Film Tax Incentives Back in the Spotlight

States have shown a renewed interest in film tax incentive programs in recent years. This brief discusses recent legislative enactments, how state incentive programs compare, and how they can be made more effective based on state fiscal office evaluations.

April 2022
Empty Shelf

Is Backordered the New Normal?

The pandemic exacerbated global supply chain issues. Increased demand, efficiency practices and labor shortages have crowded ports and left shelves empty. This brief examines federal and state efforts to alleviate supply chain disruptions.

March 2022
How nonprofits benefit

FY 2022 State Budget Update

State revenues for FY 2022 are strong with collections from the major tax categories exceeding or meeting estimates in most cases. There is optimism that robust growth can continue, but uncertainty in the U.S. and global economies have states remaining cautious.

February 2022
How nonprofits benefit

What You Might Not Know—But Should—About ARPA

This brief explores two often underemphasized aspects of the American Rescue Plan Act, the use of Coronavirus Fiscal Recovery Funds by territories and the Capital Projects Fund. 

January 2022
How nonprofits benefit

Top Fiscal Issues for 2022

Legislators are returning to state capitols for their 2022 sessions with more funds than they anticipated thanks to rebounding revenues and federal assistance. However, states still face economic uncertainty and many challenges. This fiscal brief looks at some of states’ top fiscal priorities for the new year.

December 2021
How nonprofits benefit

'Tis the Season for Giving: How Nonprofits Benefit

The holiday season is in full swing. A time of year that highlights the important role community nonprofits play and also signals the last chance for taxpayers to take advantage of charitable tax benefits before year-end. This brief provides a glimpse into recent state legislation impacting nonprofit activities and looks at how states treat charitable contributions.

November 2021
Back to School

2021 Statewide Ballot Measures: Overview of Fiscal Proposals

Voters across the country will express their political voice on statewide ballot measures during the 2021 November elections. While the elections cover various state-level issue areas, this brief explores proposed measures with fiscal impacts.

October 2021
Back to School

Fiscal Recovery Funds Out the Door

At least 36 states have allocated a portion of their funds from the American Rescue Plan Act (ARPA) of 2021 Coronavirus State Fiscal Recovery Funds. The influx of stimulus money is a life saver for state budgets, and also creates a challenge to spend funds wisely.

September 2021
Back to School

Back to School, Back to Sales Tax Holidays

Seventeen states have planned at least one sales tax holiday in 2021, providing a temporary period for customers to purchase certain items tax free. What are the fiscal effects of this type of tax relief effort?

August 2021
State Broadband Spending

State Broadband Spending in 2021

In the 2021 legislative session, 47 states, the District of Columbia and Puerto Rico have introduced at least 175 bills addressing funding for broadband, including nine states who have allocated federal recovery funds for broadband through legislation. This brief provides examples of how states are using state and federal monies for broadband.

July 2021
Emergency Authority

2021 Tax Trends: Income Tax Cuts Back on the Menu

With revenues performing better than expected and additional federal funds helping to stabilize their budgets, many states have enacted various forms of tax relief in 2021. In particular, personal and corporate income tax cuts have re-emerged as post-pandemic policy pursuits.

June 2021
Emergency Authority

The Great Debate: Who Has the Authority to Spend Federal Stimulus Funds?

Federal stimulus funds are flowing into the states at unprecedented levels, including aid for state governments to use at their discretion. This has led to battles in some states over who can allocate those funds – the legislature or the governor? This brief explores the difficulty in answering this question and some of the tensions that have surfaced.

May 2021
Sport Gambling

States Gearing Up for Fiscal Recovery Funds

This brief reviews how states are preparing to receive and spend the Coronavirus State Fiscal Recovery Funds under the American Rescue Plan Act of 2021. 

April 2021
New Federal Funds

States Mind Their Own Businesses

Over the last year, the pandemic has left small businesses and the economies they support, vulnerable. Lawmakers at all levels of government took action to prioritize business relief to keep main street and state economies from irrevocable damage. This brief reviews state grant, loan and tax relief actions for small businesses.  
 

March 2021
Sport Gambling

The Early Bets Are In: Is Sports Betting Paying Off?

Sports betting is now legal in half of the states, but many questions still linger about how to tax and regulate this new, legal market. In particular, the apparent revenue boost associated with the adoption of mobile gambling has many states considering whether they will bring operations online. This brief covers the significant fiscal policy considerations associated with this new area of state-sanctioned gambling.

February 2021

COVID-19 Liability Legislation

As the COVID-19 pandemic persists, legislators continue to raise concerns regarding potential liability for exposure to and injuries from the coronavirus. This brief examines liability legislation to address health and medical, business, PPE and general liability issues.

January 2021

State Cannabis Taxation

A review of state approaches to cannabis taxation, revenue collections to date and other policy considerations.

December 2020

Reviewing State Actions on Coronavirus Relief Funds

The federal deadline for states to spend resources from the CARES Act Coronavirus Relief Fund is Dec. 30. This brief reviews state spending trends and examines the possibility of additional relief, flexibility and a deadline extension.

November 2020

2020 General Election: Tax and Other Revenue-Related Ballot Measures

Voters in states across the country must decide on at least 30 tax- and revenue-related ballot measures during the November 2020 elections. This brief provides an overview of the proposals with the most significant fiscal ramifications.

October 2020

Broadband Spending: Bridging the Digital Divide

The impact of the COVID-19 pandemic on distance learning and working from home has illuminated the digital divide—the gap between those who have access to high-speed internet and devices and those who do not. This brief provides examples of how states are using their COVID-19 relief fund allocation for broadband and technology purposes to help people working remotely, patients getting treatment through telehealth and students attending school online.

September 2020

Internet Gambling: Expansion on the Horizon?

Relatively few states have authorized lottery and casino play over the internet, but that may change as states look for options to shore up their budgets.

August 2020

How States are Spending Coronavirus Relief Funds

Many states have allocated funding to various relief efforts. Others are meeting in special session to decide how and where to spend the federal funds. As the nation continues to endure this unusual public health and economic crisis, strategies to spend relief funds vary by state.

July 2020
e

Late State Budgets

The majority of states began fiscal year 2021 on July 1, and uncertainty around fiscal conditions led some to adopt creative budgeting maneuvers. This brief provides insight into what happens when a state budget is not passed on time, and the disruption of the budget process from the COVID-19 pandemic.

June 2020
e

Health Rainy Day Funds Not Immune From Ill Effects of Coronavirus

Heading into 2020, state budget reserves were as healthy as they had ever been, averaging between 8% and 12% for most states. Yet faced with the pandemic and massive revenue reductions from the economic shutdown, those seemingly plentiful rainy day reserves amount to a mere drop in the bucket.

May 2020
e

State Reliance on Particular Taxes Provides a Peek at Revenue Vulnerability

As the United States confronts COVID-19 with stay-home orders, economic activity has come to a screeching halt. The result, while beneficial to human health, will be devastating to state fiscal health. The problem is particularly acute in states that rely heavily on sales and income taxes, which it turns out, is most states.

April 2020
e

Looking Back with a Crisis on the Horizon—How States Closed Budget Gaps During the Great Recession

The impact COVID-19 is having on the American economy is unprecedented. While the full economic ramifications of these disruptions are still unknown, it is safe to say that state coffers will soon be under significant distress. While the current fiscal crisis is unique, it may be helpful to revisit revenue actions during the Great Recession as states once again chart a course toward recovery.

March 2020
e

A Quick Take on Traditional and Electronic Cigarette Taxes

It’s rare to find a popular tax, but the tobacco tax comes pretty close. Majorities of Democrats, Republicans and Independents support it. As the usage rates of electronic cigarettes has increased, many states have taken action to incorporate them into the tax code.