States Challenge the American Rescue Plan Act

In this article, George L. Salis, the principal economist and tax policy adviser of Vertex Inc., explores why many states are still struggling to catch up to their pre-COVID-19 budget levels while others are staying ahead.

It is a well-established historical fact that the road to economic recovery and growth after a crisis is generally muddled with broad legal challenges and local economic adjustments. This is particularly so in our current polemical and partisan environment. Although several states are recovering from the COVID-19 pandemic at an unexpected pace, many others struggle to catch up to their pre-pandemic budget levels. However, some states still have budgetary hurdles to overcome and continue to rely on the federal government’s support to fill those fiscal gaps until their local and regional recovery is firmer and economic growth ensues.