The Covid-19 pandemic is impacting state and local tax revenues similar to any other recession.
The level of impact, however, is far higher than historical figures.
David Wessel, director of Hutchins Center on Fiscal & Monetary Policy, shared an article on how state and local tax revenues have been impacted by the Covid-19 pandemic in the US.
The impact of income tax revenues is recorded to be low as most of the employment losses are concentrated on low-wage workers.
Sales and other tax revenues, however, have fallen sharply compared to historical figures due to fall in consumption rate as more people are staying home.
As a result, revenues generated from taxes and fees imposed on the tourism, travel and hospitality sectors have plummeted.
Revenues of state and local governments are expected to decline by 5.5% in 2020 and 5.7% in 2021, the article added.
The fiscal aid provided by the government has helped in offsetting some of the revenue losses but state and local governments are expected to face further shortfalls forcing them to make spending cuts.
In other news, Ian Bremmer, a political scientist and author, shared an article on how cyberattacks have increased amid the pandemic.