Year of Publication
Martin School of Public Policy and Administration
Master of Public Administration
Dr. Ron Zimmer
The COVID-19 pandemic has taken its toll on states’ coffers due to declining revenues and in response state budget authorities have taken action to adjust budgets in order to maintain proper financial balance. At the end of fiscal year 2020 on June 30, 2020, budget authorities in 46 states likely found themselves straining to make sure their state’s bottom line was not grossly negative. That strain has since continued into fiscal year 2021, which started the day after. As revenues appear to be on the rise again and the financial hardships lessened, an evaluation of the responses to the pandemic’s fiscal stress is now possible.
This paper provides a detailed assessment of the budget and fiscal policy actions taken by Arkansas, Kentucky, Louisiana, Oklahoma, and Tennessee to manage the fiscal impact of COVID-19. In addition to reporting on the actions taken by these states, the study reviews their actions relative to recommended policy and practice responses as prescribed in the Volcker Alliance study of state budget practices. Altogether, it establishes a compelling narrative of state budget and fiscal policy actions as the country continues to combat the largest public health crisis it has faced in more than a century.
Using publicly available documents, I compared the budget and fiscal policy actions of each state to the rest of the cohort and discovered that budget authorities employed a wide array of strategies. These strategies included extensive use of federal relief and personal state reserve funds, enactment of budget reductions, and revisions to revenue forecasts. When reviewed through the lens of the Volcker study’s best practices, states the Volcker study had designated as not following best practice fared well among the cohort while others struggled. These findings offer new considerations to what may truly define “best” in terms of best practice for state budget processes.
Jansen, Jacob, "The Fiscal Impact of COVID-19: A Study of Five States" (2021). MPA/MPP/MPFM Capstone Projects. 385.