Source: Dan White, Emily Mandel, and Colin Seitz, Moody’s, December 17, 2020
Will the money come from taxpayers over time funding federal debt or more immediately in tax hikes and austerity measures?
- Without additional federal assistance we project states and local governments will be forced to raise taxes or cut spending by between $171 billion and $301 billion over the next year and a half.
- Though nearly every state will see significant fiscal stress this year and next, the consequences of these shortfalls will vary even more than usual from one state to another.
- How federal policymakers choose to react to these shortfalls will have significant implications for the economic outlook.