In spring 2020, state and local governments were confronted with cascading costs in managing the public health response to the pandemic, spiking unemployment, and steep sales tax and user fee revenue declines resulting from business disruption and restrictions.
The situation appeared dire.
During the second quarter of 2020, from April to June, the U.S. Government Accounting Office (GAO) reported state and local government revenues had declined by $61 billion compared to the same three-month span the year before.
Overall in 2020, state and local governments would report $117 billion less in revenues than the previous year, mostly stemming from that April-June span, according to estimates of 2020 pandemic-related revenue losses filed with the U.S. Treasury.
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