The next economic crisis will hit states and cities – By Stef W. Kight, Dan Primack (Axios) / April 13 2020
America’s economic crisis soon may expand to its states, cities, and towns.
The big picture: State and local tax revenue is falling, particularly in areas heavily reliant on sales taxes, while spending is up due to added unemployment and medical obligations.
Just look at Arizona, which is near the middle of the pack when it comes to sales tax as a percentage of total state revenue. It’s been projecting a $1 billion surplus by the end of its fiscal year in June, but now expects a $1.1 billion deficit for the year ending June 2021.
- Arizona has a relatively large rainy day fund, but it’s not enough to cover the likely tax shortfall.
Or Nevada, which is more reliant on total sales tax than is any other American state, due to its lack of income tax and its outsized gaming and tourism industries.
- Nevada Gov. Steve Sisolak on Friday asked all state agencies to prepare budget cuts of up to 4% for the fiscal year ending at the end of June, and between 6% and 14% for the following fiscal year.
The most critical cases may be Florida and Louisiana, which both are in the top 10 for sales tax dependency and have rainy day funds that represent less than 5% of annual expenditures.
Continue to article: https://www.axios.com/coronavirus-states-cities-economic-crisis-519d28b2-2126-4749-b94b-a3dcbdcf0feb.html
