1、CRS INSIGHT Prepared for Members and Committees of Congress INSIGHTINSIGHTi i State and Local Fiscal Conditions and COVID-19: Lessons from the Great Recession and Current Projections Updated December 7, 2020 Federal assistance to state and local governments has been a central part of the fiscal poli
2、cy discussion surrounding the COVID-19 pandemic. Economic downturns tend to depress the tax bases of federal, state, and local governments and increase demands for certain spending programs. Unlike at the federal level, however, most states and localities have statutory requirements to balance their
3、 budgets every one or two years. Absent other measures, these balanced budget requirements can necessitate tax rate increases or spending cuts that could exacerbate economic distress. Evidence from the Great Recession The Great Recession, which lasted from December 2007 to June 2009 as measured by t
4、he National Bureau of Economic Research (NBER), was considered the largest U.S. economic shock since the Great Depression, as significant disruption in the housing and financial markets generated adverse conditions throughout the economy. At its peak, quarterly real gross domestic product (GDP) decl
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