A number of states are feeling financial strain as they deal with lower income tax revenues for April compared to last year, but Fitch Ratings says most remain on track to meet or exceed year-end budget forecasts thanks in part to conservative revenue projections and prior-year surpluses that boosted reserves.
April is a key month for tax-related income for states given the mid-April tax deadline, with last year’s strong performance driving very large budget surpluses for many states.
Anticipating weaker tax revenue this year, however, many states used surplus revenue from previous years to strengthen reserves in a bid to mitigate potential risks and so help stabilize state ratings….