The financial strain of COVID-19 raised significant uncertainties around the resources that states would have available post-pandemic and where they would be willing to invest what many feared would be sharply restricted budgets. To understand the real impact of COVID-19 on the availability of state dollars, Manatt developed a report tracking revenue and spending priorities in the 15 most populous states. The tracker reviews state revenue performance in the pandemic period compared to initial expectations and identifies budget priorities moving forward. Including analyses of each state’s overall budget and Medicaid/health care-specific budget, it enables health care organizations to assess and plan for state spending as we emerge from the pandemic. Top-line findings are summarized below. To download a free infographic illustrating highlights of our analyses, click here.
Download Infographic
The full tracker is available through Insights@ManattHealth—Manatt’s premium subscription service—or as a stand-alone report. To learn more or to schedule a demo, please contact Barret Jefferds at bjefferds@manatt.com.
Key Findings
Total state revenue in 2020 was virtually the same as in the previous year. But while revenue collections exceeded expectations in most states, certain states experienced double-digit revenue declines driven by the pandemic. Key findings show that:
- States dependent on income taxes (New York, California) are seeing revenue come back faster than those reliant on sales taxes (Texas, Florida). Pre-COVID-19 tax law reform in some states (Arizona, Ohio) enabled significant revenue from online shopping during the pandemic.
- Federal supplements and unemployment benefits supported consumer spending and related sales taxes, while the stock market rally drove higher-than-expected capital gain revenues in several states.
- Going forward, state budgets, supported by federal aid, are focused on investing in economic recovery, education, health care and infrastructure.
About Insights@ManattHealth
Insights@ManattHealth provides personalized, in-depth analysis of legal, policy, and market developments to keep you ahead of the trends shaping our evolving health care system. Available by subscription, Insights@ManattHealth gives you easy access to Manatt Health’s robust library of cutting-edge thought leadership, including weekly memos on federal and state policy changes; detailed summaries of Medicaid, Medicare and Marketplace regulatory and subregulatory guidance, as well as synopses of health care litigation developments; 50-state surveys on today’s hottest health care topics; and access to Manatt Health’s industry-leading white papers, webinars and more.