State Revenue Forecasts Before COVID-19 and Directions Forward

The global pandemic caused by the novel coronavirus outbreak will dramatically affect state tax revenues over the next months and possibly years. This brief summarizes how state revenue forecasters viewed their state economies before the COVID-19 pandemic, as documented in governors’ proposed fiscal year 2021 budgets. Although forecasters are now radically revising those projections, knowing the prior trajectories of personal income, corporate income, and sales tax collections is useful for planning purposes. This brief also identifies forecast inputs to watch in the coming months for signs of the magnitude and breadth of state budget turbulence.