States have begun to announce major projected budget shortfalls. Some estimates put the national total at $500 billion. The COVID-19 pandemic has not only decreased revenues, but also increased the need for state spending. The result is large gaps and looming calamity. Many states are asking the federal government to include relief in future stimulus packages. Some leaders in Washington have even suggested that states file for bankruptcy, but that has many adverse and disruptive consequences and is likely unconstitutional.
Texas Comptroller Glenn Hegar is out with his estimate of the amount of money that will be available to the Texas Legislature for the next budget cycle, and the news is not terrible (we have seen much worse in the past), but is also not good. At a time when the population continues to grow and there are major issues that need to be dealt with, revenues are falling short. In fact, they're about $5 billion below the level needed to keep services where they are, which leaves us far short of extra money needed for solving some big problems. On top of that, there is some support for lowering certain taxes; we all like to pay less, but practicality should limit this option.