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leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and global
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State Forecasts Indicate $121
Billion 2-Year Tax Revenue Losses
Compared to FY 2019
• Extrapolating from recently revised state revenue forecasts yields an
estimated nationwide $121 billion decline in state tax collections across FYs
2020 and 2021 against a FY 2019 baseline, and $191 billion compared to
initial tax revenue projections for those two years.
• These estimates are consistent with the results of other recent analyses, and,
while representing significant losses, are at the lower end of many preliminary
forecasts of the state revenue implications of the COVID-19 pandemic.
• All major taxes have been affected by the crisis, but for the current fiscal year,
states expect income tax collections (both individual and corporate) to be
further off the FY 2019 baseline than sales taxes, which may begin to stabilize
as the sharp early contraction in consumer spending, at the outset of stay-at-
home orders, gives way to somewhat more typical spending patterns.
• Although these numbers should be regarded as provisional, and no one can
fully account for the possibility of subsequent economic shocks, they can help
federal lawmakers formulate an appropriate response when designing any
further package of state and local relief.
Vice President of State Projects
TAX FOUNDATION | 2
Revised state revenue forecasts show a significant decline in projected revenues for both the
recently concluded FY 2020 and current FY 2021, though the picture they paint is considerably