State Budget Tracking Summaries Updated February 25, 2021

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Table of Contents Alabama...... 3 Alaska ...... 3 Arizona ...... 5 Arkansas ...... 7 California ...... 7 Colorado ...... 10 Connecticut ...... 12 Delaware ...... 13 District of Columbia ...... 14 Florida ...... 15 Georgia ...... 16 Hawaii ...... 17 Idaho ...... 19 Illinois ...... 21 Indiana...... 21 Iowa ...... 22 Kansas ...... 23 Kentucky ...... 24 Louisiana ...... 24 Maine ...... 25 Maryland ...... 27 Massachusetts ...... 28 Michigan ...... 29 Minnesota ...... 30 Mississippi...... 30 Missouri ...... 31 Montana ...... 31 Nebraska ...... 32 Nevada ...... 34 New Hampshire ...... 36 New Jersey ...... 37 New Mexico ...... 39 New York ...... 41 North Carolina ...... 42 North Dakota ...... 43 Ohio ...... 44 Oklahoma ...... 45 Oregon ...... 47 Pennsylvania ...... 48 Puerto Rico ...... 49 Rhode Island ...... 50 South Carolina ...... 51 South Dakota...... 51 Tennessee ...... 53 Texas ...... 53 Utah ...... 55 Vermont ...... 56 Virginia ...... 57 Washington ...... 58 West Virginia ...... 59 Wisconsin ...... 60 Wyoming ...... 61

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Alabama • February 25 update: Governor Ivey proposed a $441 million increase in the education budget for FY 2022, bringing the total budget to nearly 7.7 billion. Additionally, the budget includes a 2% raise for teachers and all education employees from pre-K through two-year colleges (The Birmingham News). • The Alabama Department of Revenue issued guidance on tax relief measures for taxpayers and employers. This guidance comes shortly after Governor Ivey announced an emergency proclamation that made changes to tax return forms in the State so that residents and businesses will forgo paying state taxes on CARES Act benefits (WBRC). • Annual renewal of tax licenses for businesses in Alabama are now required. This rule requires businesses to obtain a license from the Alabama Department of Revenue to ensure businesses are properly registered with the Department. If a business does not renew its license, the license will expire, and the account will no longer be active. Every license will expire December 31, 2020. The renewal process opens November 1, 2020 (WBRC). • Alabama’s gross tax revenue was up 5.3% at the end of August with one month remaining in the pandemic-affected fiscal year (WBRC). • Despite slower revenues, the State does not intend to propose cuts as of August 2020. Net income tax receipts totaled $459 million, up from $129 million in July 2019 due to postponement. The July numbers raised the total income tax receipts for this fiscal year to $3.6 billion, 0.3% more than last fiscal year (Alabama Local News).

Alaska • The governor introduced a proposal to state legislature that requests to borrow $356.4 million for various construction projects, including $187 million on the State’s major maintenance list that includes 108 projects. Initial reactions are mixed, and the proposal needs to be passed by both the House and Senate, as well as through a statewide referendum which will be conducted through a special election. That election would occur between 90-120 days after the Legislature adjourns its regular session (Anchorage Daily News). • State government is relaunching its Checkbook Online system that will allow state residents, reporters, citizen watchdogs, and legislators to track government spending on contracts and services in the executive branch agencies and the Legislature. The earlier system, which went offline nearly a year ago, was impaired by the lack of internal controls, assurance measures, and auditing as state government was facing a massive budget shortfall due to COVID-19. The new system would have new features, proposed via Senate Bill 25, such as spending details from the state university system and state corporations (Alaska Public Media). • The governor introduced legislation (SB 56) that would extend the current COVID-19 public health emergency (PHE) until September 30. The PHE was scheduled to expire in mid-February. The PHE declaration grants the governor at most $10 million from the State’s disaster relief fund, as well as $20 million in transfer authority from the Alaska Department of Health and Social Services and federal Medicaid receipts (Anchorage Daily News).

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• The Alaska House Finance Committee held a hearing to review the plan the $8.9 billion budget proposal for FY 2022 released by the governor in December. One point of concern over the proposal was the withdrawal of $3 billion from the State’s Permanent Fund which could reduce the Fund’s investment potential and risk future dividends. The Alaska House Health and Social Services Committee heard testimonies on January 13 on the governor’s proposal to split Department of Health and Social Services (DHSS) into two separate departments. There was strong opposition to the split due to the concern of the split doing more harm than good and the lack of transparency. Once the legislature begins, an Executive Order will be introduced. Alaska will receive a portion of $6.5 million in federal funds to develop a telehealth broadband pilot program for increasing telehealth services in rural areas (State of Reform). • The governor introduced an executive order to split the Department of Health and Human Services into two separate entities. The Department of Health will be responsible for Medicaid and public health, while the Department of Family and Community Services will oversee children’s services, juvenile justice, assisted living facilities, and the State’s psychiatric hospital (Associated Press). • On December 11, the Governor unveiled his budget request for the upcoming fiscal year that includes a significant withdrawal from the State’s Permanent Fund (about $6.3 billion). The Permanent Fund request is notably higher than previous years to account for the State’s $2 billion shortfall (Alaska Public Media). • Governor Dunleavy announced a new COVID-19 disaster declaration on November 6 to extend the emergency declaration issued in March, which was set to November 15. Given the rise in cases and continued uncertainty, the Legislature likely will be called into a special session to extend the emergency declaration (US News). • In September, Medicaid enrollment grew by about 5% since March 2020 and covered one in three state residents. Although enrollment numbers are in line with current state projections, the state continues to deal with a $1 billion shortfall, which could be exacerbated if the federal government does not extend the PHE and related FMAP enhancement, currently set to expire October 23 (AP News, Alaska Public Media). • While more Alaskans are covered by Medicaid, it is not yet clear if the State will have to spend more money on the program, which is the second largest component in the State’s budget after public education. Policymakers are also struggling to close the budget deficit, which is more than $1 billion and would be more than $2.3 billion if the State paid permanent fund dividends using the formula in a 1982 state law. The State’s share of total Medicaid spending is $645 million. However, the Department of Health and Social Services said Medicaid spending in the first 11 weeks of the state budget that started in July is on track with what the State had projected (KTOO). • In March 2020, Governor Dunleavy and the Legislature reduced the Medicaid budget by about $170 million but did not pass a supplemental budget (US News).

o As a result, the State’s Medicaid accounts have insufficient funding to cover costs, and the State began rationing Medicaid funding in the spring (Anchorage Daily News).

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Arizona • Arizona Superior Court allowed a new income tax that would implement a 3.5% surcharge on wealthy Arizona residents (earnings above $250,000/$500,00 for individuals/married couples filing jointly) to fund public education. The new tax law, called Proposition 208, was passed in a statewide referendum but was challenged in court by Republican lawmakers and business interests as it was considered constitutionally flawed. It is estimated that 4% of Arizona residents will be affected by the new tax but it is expected to generate $827-$940 million per year (Tucson Arizona Daily Star). • The Arizona House Commerce Committee approved a major legislation that would expand legal gaming and waging on professional and college sports, as well as legalize betting on fantasy sports and would grant off-track betting locations and service organizations the right to offer Keno. The House committee’s 9-1 approval came after substantial lobbying by sports teams, Native American tribes, and support from the Governor’s Office, and is the first step for HB 2772 and its senate counterpart SB 1797 to become law. Once signed into law, the legislation is expected to generate $20-$42 million per year for the state general fund (Tucson Arizona Daily Star). • The Arizona Superintendent requested more funds for public schools from the Senate Education Committee, as the statewide school system is facing a $247 million budget shortfall. This comes after the $370 million one-time compensation by the governor. However, public schools are still expected to lose up to $500 million in aid because of the state law that provides funding for distance learning at 5% less than in-person instruction. At the same time, the State is permanently cutting taxes by $200 million for the next fiscal year and projects a $2 billion surplus (Tucson Arizona Daily Star). • State lawmakers introduced a bill (SB 1108) that would reduce business property taxes dropping the business assessment ratio from 18% to 17% with further reduction to 15% in the future. The state finance committee approved the full measure, passing it along to the state Senate (Tucson Arizona Daily Star). • Senate Republicans proposed $250 million in additional tax cuts for the next budget year on top of the $200 million tax cuts already proposed by the governor. While the governor’s tax cut proposal is permanent, the additional tax cuts proposed by the state Senate Republicans would only be for one year. Legislative budget staffers have anticipated $2 billion surplus for FY 2022 after including the governor’s $12.6 billion spending proposal (Arizona Daily Star). • Governor Doug Ducey announced an additional $1 million for the Safest Outside Restaurant Assistance Program, a statewide program developed in December 2020 to help restaurants expand outdoor dining to limit the spread of COVID-19. The investment will be directed to pending applications submitted to the program and comes after an initial investment of $1 million in December and an additional $2 million in January 2021. The funding is coming from the State’s Crisis Contingency and Safety Net Fund, a bipartisan budget agreement that added $50 million for Arizona’s COVID-19 response (Office of the Governor). • Governor Ducey strongly encouraged the state legislature to support his budget proposal’s investment of more than $40 million in substantially expanding broadband in rural Arizona. The proposal has $33.1 million to install broadband conduit and fiber from Flagstaff to the California

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border along I-40, as well as $10 million investment to renew and expand Rural Broadband Development Grant Program (Office of the Governor). • The Arizona Department of Revenue (ADOR) made some key adjustments to the 2020 individual income tax returns. One of these adjustments is the state standard deductions amount has been matched to the federal standard deduction amounts (ADOR). • Health care providers who provided COVID-19 testing, treatment, and vaccination to uninsured Arizonans on or after February 4, 2020 can now be reimbursed at Medicare levels and begin processing the claims on the COVID-19 Uninsured Program Portal developed by Health Resources and Services Administration (HRSA). Providers will be required to verify and attest the patients’ uninsured status at the time of treatment (AHCCCS). • The governor introduced a $12.6 billion budget proposal for FY 2022, the largest budget proposal in the State’s history. The plan calls for $200 million in income tax cuts beginning July 1, 2021, amounting to $600 million in the next three years. However, given the revenue surplus, there will be $389 million in funding for helping students catch up from pandemic-induced learning losses, as well as an additional $250 million for K-12 education. There is also $92.7 million in FY 2021 supplemental funding for childcare centers, $25 million for implementation of the Family First Prevention Services Act, and $18 million to fund the Child Care Waitlist and a new pilot program that provides childcare to children of parents pursuing education (Chamber Business News). • On December 5, AHCCCS announced it will compile and submit public comments together with its 1115 waiver renewal request to CMS by December 31.

o AHCCCS submitted its 1115 Waiver demonstration renewal request to CMS on December 22. AHCCCS in the final renewal packet is seeking a five-year extension of many existing demonstration authorities as well as seeking to implement the following new requests: . Authority to allow for verbal consent in lieu of written signature for Arizona Long Term Care System (ALTCS) members on all care and treatment documentation. . Authority to reimburse traditional healing services provided in, at, or as part of clinical services offered by IHS, tribal organization, or an Urban Indian health program. . Authority to reimburse IHS and Tribal 638 facilities to cover the cost of adult dental services that are eligible for 100% FFP, that are in excess of the $1,000 emergency dental limit for adult members in Arizona’s State Plan and the $1,000 dental limit for individuals age 21 or older enrolled in the ALTCS program.

o The federal public comment period is open through February 3, 2021 and AHCCCS will meet with CMS through 2021 to finalize the 1115 waiver (AHCCCS). • Arizona received more than $4 billion in CARES Act funds and distributed most of the dollars to state agencies including AHCCCS. The Governor has opted to distribute the funds to help agencies pay for operations and stabilize the State’s budget (SFGate).

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• Governor Doug Ducey announced plans to dedicate $25 million from the CARES Act funding to support hospital staffing. The funds will be used to reward existing direct care staff as well as cover higher staffing expenses resulting from COVID-19 (Office of the Governor Arizona). • AHSCCS received federal approval to increase hospital reimbursement rates by more than 30%. The Hospital Enhanced Access Leading to Health Improvements Initiative (HEALTHII) will result in a net increase in payments to eligible Arizona hospitals of approximately $800 million in the first year of implementation. Since March 2020, eligible rural acute care hospitals received an additional $5.3 million. Hospitals that participated in the 2019 Graduate Medical Education Program received $50 million in accelerated payments. Further, several hospitals, primary care providers, behavioral health outpatient providers, and behavioral health clinics that coordinate services for formerly incarcerated individuals were advanced more than $41 million in scheduled payments (AHCCCS).

Arkansas • February 25 update: The Arkansas House passed several health care related bills, including HB1176 which would ensure that Arkansas Medicaid reimbursements for telemedicine of certain behavioral and mental health services continue after the PHE ends (KTLO). • Governor Hutchinson called on state lawmakers to set a goal of increasing the average salary for teachers by $2,000 during the next two years. The governor is also asking for $50 million in tax cuts: reducing sales tax on used cars selling for $4,000 - $10,000 from 6.5% to 3.5%, as well as lower the tax rate for new residents to 4.9% over five years (WMC). • During the first half of FY 2021, total general revenues increased by nearly $321 million, or 9.5% compared to the first six months in FY 2020. To date, the State's net general revenues increased by almost $258 million, or 8.7% compared to this time last year, exceeding the State’s original forecast by a little more than $319.4 million (The Arkansas Democrat-Gazette). • Effective January 1, 2021, Arkansas’ top individual income tax rate will drop from 6.6% to 5.9%. The tax rate reduction is part of Governor Hutchinson’s plan to decrease the rate over a two- year period, which started last year. About 200,000 taxpayers will be affected by this change. The 6.6% rate applies to income above $82,000 in 2020, while income from $8,301 to $82,000 is taxed at a top rate of 5.9% (The Arkansas Democrat-Gazette). • The State’s CARES Act Steering Committee allocated $1.1 billion of the $1.25 billion it received to the Department of Health, Department of Human Services, the Department of Finance and Administration, and the Department of Commerce. There is about $19 million left to spend before the end of the year (KARK-TV). • Arkansas Department of Finance and Administration released their General Revenue Report for August FY 2021, reporting that August Net Available General Revenues totaled $485.5 million, 8.1% above last year and 9.2% above forecast (State of Arkansas).

California • February 25 update: Governor Newsom announced the COVID-19 relief program, “Golden State stimulus,” will be up for legislative approval the week of February 22. California is proposing a $9.6 billion economic recovery package that will come from state taxpayer dollars made

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possible by tax revenue collections that were better than projected in mid-2020. In addition to the $600 stimulus, the proposal includes $2.1 in grants for small businesses, $100 million in emergency financial aid for low-income students at California Community Colleges, $24 million for financial aid through Housing for the Harvest, $35 million for food banks, and $6 million for outreach and application assistance for University of California, Cal State, and Community Colleges students for CalFresh (LA Times). • The proposed Governor’s Budget was released on January 8. The overall budget had a $34 billion surplus compared to the Budget Act appropriation due to a more positive fiscal outlook than when the budget passed in mid-2020. This resulted in the ability to eliminate or delay funding and program cuts and make targeted investments in programs that had been previously delayed due to the uncertainty created by the COVID-19 PHE. The Health and Human Services Agency was allocated $195.1 billion ($64.3 billion General Fund; $130.8 billion for other funds) for all health and human services programs (not including COVID-19 response costs). A few highlights from the proposed budget include:

o California Advancing and Innovating Medi-Cal (CalAIM): The proposed budget includes a significant General Fund investment (FY 21-22 - $549.9 million General Fund; $1.1 billion total funds) for CalAIM to transition from the State’s current 1115 waiver and continue to improve the Medi-Cal program through delivery system transformation and payment reforms to improve member experience, health outcomes, and achieve long- term cost savings.

o Health Equity: Policy and program efforts to promote health equity including but not limited to the implementation of CalAIM, the upcoming Medi-Cal Managed Care Plan procurement, and payment reform efforts.

o Telehealth Flexibilities: The Administration proposes to make some of the flexibilities available during the COVID-19 PHE permanent. This effort focuses on improving equitable access to health care providers, addressing inequities and disparities in care. Among the telehealth proposals, this budget allocates $94.8 million total funds ($34 million General Fund) towards remote patient monitoring services in fee-for- service and managed care.

o Behavioral Health: The budget includes a one-time $400 million ($200 million General Fund) investment available over multiple years to implement an incentive program through Medi-Cal managed care plans in coordination with counties and schools to improve the delivery of early intervention behavioral health services to students in schools. The budget also includes $750 million in General Funds for county grants to acquire and renovate property to build and expand a continuum of community behavioral health treatment resources.

o Increased Caseload: The Medi-Cal caseload is expected to increase because of the COVID-19 PHE to 14 million average monthly enrollments in FY 2020-21 (associated cost increase of $5.4 billion total funds; $1.7 billion General Fund). In FY 2021-22, the budget assumes the Medi-Cal caseload will increase to approximately 15.6 million average monthly enrollments (associated cost increase $13.5 billion total funds; $4.3 billion General Fund). The budget also assumes the federal PHE will be extended through December 2021 and as a result, Medi-Cal redeterminations and coverage termination

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will also continue to be suspended (with limited exceptions) until the end of the PHE (DHCS, CA.gov). • On December 17, California Assembly Budget Committee Chair Phil Ting released the FY 21-22 Budget Blueprint which is divided into four sections: Preserve, Respond, Protect, Recover. The FY 21-22 budget projects a $26 billion budget surplus; however, in subsequent years deficits are projected. The Budget Blueprint aims to “protect” and streamline Medi-Cal, In-Home Supportive Services (IHSS), and other major programs that aid vulnerable Californians by streamlining programs and reduce barriers to entry (California State Assembly - 2021-22 Blueprint for a Responsible Budget). • Former HHS Secretary Alex Azar announced plans to withhold $200 million in Medicaid funding for California in 2021 because of a state requirement that state insurers must provide abortion coverage (CNN). • In November 2020, California’s Legislative Analyst Office (LAO) projected the State to have a $26 billion onetime windfall. In the report, the LAO said the revenues could be as high as $40 billion over the next 18 months or as low as $12 billion. Due to the onetime nature of this budget windfall, the LAO recommended splitting the surplus between reserves and spending on COVID- 19 response (LAO). • On September 23, 2020, CMS announced supplemental funding up to $165 million for states operating Money Follows the Person (MFP) program demonstrations. Each state was eligible to receive up to $5 million in funding for planning and capacity building for long-term care systems and HCBS expansion (DHCS). • Delays in a second federal stimulus package reduces the chance that California will restore billions of dollars of budget cuts as part of an agreement with Governor Newsom. California’s final budget included more than $11 billion in cuts and deferrals that were dependent on the state receiving $14 billion in federal COVID-19 relief by October 15. The enacted state budget assumed that California would receive a minimum of $2 billion from Congress in a new stimulus package (Politico). • With a projected $54 billion budget deficit, California’s legislative year concluded with Governor Newsom enacting multiple new laws with intentions of lowering consumer health care spending and expanding access to coverage. Key bills passed include granting nurse practitioners the ability to practice without physician supervision and require state-regulated health insurers in California to cover all treatment deemed medically necessary for mental health and substance abuse disorders, from depression to opioid addiction. California will also enter the generic drug market, passing a first-in-the-nation law that will put the state government in direct competition with private drug manufacturers.

o Bills not passed include: a measure that would have given the state attorney general more authority to reject hospital consolidations, expanded the state's Medicaid program to unauthorized immigrants ages 65 and up, and capped consumers' out-of- pocket costs for insulin (Modern Healthcare). • Prior to Governor Gavin Newsom’s May Revision, California’s budget deficit was approximately $54 billion due to COVID-19 (California Budget). The $54 billion deficit is most notably from:

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o Lower Revenues: Substantial decline in revenues due to severe economic decline in economic activity. Overall, the spending plan anticipates revenues will be lower across the budget window by $42 billion.

o Higher Caseload-Related Spending: Higher caseload-related costs across safety net programs, including: Medi-Cal, California Work Opportunity and Responsibility to Kids (CalWORKs), and CalFresh. The budget assumes a 9.2% year-over-year increase in Medi- Cal enrollees, a 51.1% increase in CalFresh participation, and a 42.4% increase in CalWORKs participating families (LAO). • The following policies will reduce the administrative costs to the Medi-Cal program but are not intended to limit or modify enrollment.

o Policies to Cut Costs for Prescription Drugs: Governor Gavin Newsom of California’s budget for FY 2021 proposes transitioning the Medi-Cal pharmacy benefit from managed care to the fee-for-service system by January 2021 which is expected to result in millions of dollars in annual savings after full implementation.

o Delivery System/MCO Changes to Contain Costs: Effective January 2021, the Governor’s Budget for FY 2021 proposes funding to create in lieu of services (ILOS) that a managed care plan could integrate to avoid, other higher cost services (NASBO State Fiscal Conditions).

Colorado • Marijuana sales reached $186 million in December 2020, making last year the first time the State’s annual sales reached more than $2 billion. Since January 2014, Colorado’s total marijuana sales to date have exceeded $9.9 billion from which the State has collected $1.6 billion in state tax revenue. About 65% of the total revenue from marijuana sales comes from the State’s 15% excise tax of which 90% is reserved for the general fund, while the remaining 10% is granted to local governments (The Center Square). • In Fall 2020, the governor introduced a $1.3 billion stimulus plan and encouraged lawmakers to fast track the bill. However, only a portion of the stimulus ($300 million) has been approved by state legislature, and the rest has been deferred by the Joint Budget Committee to a separate legislation for introduction in February. The initial $300 million provided tax breaks for struggling businesses, money for housing and rental bills, and stimulus checks to low-income unemployed earners. The remaining $1 billion proposal includes $160 million for high-speed internet investments, $220 million in public work projects, $140 million to train workers, $78 million for wildfire response, and $38 million to promote social equity and health (Colorado Sun). • Colorado state legislature approved a bill that provides $4 million in aid for minority-owned small businesses. However, the program was immediately held up in court by a white owner of a Colorado Springs barbershop alleging the bill is unconstitutional because it excludes some business owners because of their race. The program is part of the $57 million designated for small businesses and arts organization and is under the larger $300 million state stimulus package from December’s state legislative session. The lawsuit is still pending, and it has held up the distribution of the $4 million (Denver Post).

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• The governor introduced a $35 billion budget that proposes $3 billion cuts to the State’s discretionary general fund and requests $621 million and $852 million funding for K-12 and higher education respectively (SFGate). • The Colorado governor extended an executive order that provides one-time $375 stimulus payments to Colorado residents who have filed for unemployment during the COVID- 19 pandemic. Most of the money allocated for these one-time payments come from overbudgeted portions of the State’s Medicaid program with a remainder (not specified) from disaster relief funds (Denver Post). • State employees who have worked for at least 12 months will be eligible for two weeks of paid family medical leave. This is lower than the previously proposed eight-week program which will now go into effect in 2024. The two-week program is expected to cost $2.5 million, which will be paid from existing funds in the state employees benefits program and leftover funds from the Group Benefits Plan Reserve Fund. The State has enough to fund the program through 2021 and may need to ask for more funding from the General Assembly (Denver Post). • Colorado Legislative Council staff provided an overview of the State’s economic and revenue forecast to the Joint Budget Committee on December 18. While the State’s economy has rebounded more quickly than expected, a lot of uncertainty remains and recovery is uneven, with low wage workers being the most affected (Colorado Senior Lobby). • During its three-day special session in November 2020, Colorado lawmakers passed a total of 10 bills totaling approximately $300 million to provide support for small businesses, childcare grant funding, housing relief and utility assistance, improved internet access, and food pantry assistance among other items. The bills had bipartisan support (The Denver Channel). • On December 4, HCPF announced it will be expanding its substance use disorder (SUD) benefits. HCPF will be adding withdrawal management services and inpatient and residential treatment to its array of Medicaid-covered services. The regional accountable care entities (RAEs) will be responsible for delivering these services to Health First Colorado (the State’s Medicaid program) members. • HCPF posted its SFY 2021-2022 budget. The budget reflects HCPF’s intent to maintain member benefits and services and address health care disparities. Specifically, the Department has requested funding to collect disparity-related health care data to inform value-based payments for Colorado Medicaid providers (Colorado.gov). • Governor Polis issued an executive order calling for a special session on November 19. The special session, which will focus on passing a $200 million - $400 million stimulus package, is expected to begin November 30. Items on the agenda include broad band access, housing and rental assistance, small business tax breaks, childcare provider relief, additional funding for the State’s disaster emergency fund, low-income energy assistance program, and food pantry / food bank assistance (Colorado Politics). • On November 2, Governor Polis presented his $35 billion state budget plan for the upcoming fiscal year starting July 1, 2021. The plan, which will be presented to the Joint Budget Committee on November 12, includes funds to support Medicaid caseloads (US News). • On October 29, HCPF publicized distribution of the first round of advanced payment funds (more than $600,000) to primary care providers who have experience revenue loss as a result of the pandemic. Several organizations including Colorado Heath Foundation, Rose Community

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Foundation, Caring for Colorado Foundation, Rocky Mountain Health Foundation, and Delta Dental of Colorado Foundation have partnered to donate $1.93 million, which allowed HCPF to bring in matching federal funds totaling $3.63 million. A second round of advance payment funds will be made after the new year (Colorado.gov).

Connecticut • With almost $1 billion unspent in Connecticut's current budget and billions more looming in federal aid, Governor Lamont has made it clear he wants to keep spending restricted, even with push back from some fellow Democrats. Big variables are expected to cloud the upcoming state budget debate, as questions increase on how federal aid should be spent or saved while the State continues to recover from the pandemic (The CT Mirror). • Governor Lamont’s administration is expected to save up to $630 million in spending this fiscal year. However, these savings have been driven by federal pandemic aid, and lawmakers are questioning whether Connecticut should be reallocating the State’s own funds instead of saving them to increase help to pandemic-related needs. Over half of the money saved is due to enhanced federal reimbursements for Medicaid services. Some lawmakers worry that by saving this money instead of spending on additional relief, the State is missing out on providing its constituents with the help they need (CT Post). • Democratic lawmakers are proposing a tax on carriers to help support and fund the health insurance exchange to reduce costs for customers. The Health Insurance Providers Fee was originally created under the Affordable Care Act (ACA), which was repealed by Congress in 2019. The tax could bring in millions of dollars for the State and help fund other health care initiatives, such as Medicaid expansion; however, those who oppose the tax argue it would increase premiums for those who are fully insured (Health Payer Specialist). • Connecticut Comptroller Kevin Lembo gave his monthly financial and economic update, projecting the end of FY 2021 will reach a deficit of $615.2 million. This is an improvement, with signs of economic recovery through the housing market, lower spending, and improved revenue remaining positive. Despite the pandemic, Connecticut’s economy trends upwards, with the most immediate focus shifting to those who recently lost their jobs (WTIC-TV). • Governor Lamont is expected to present a budget proposal in February 2021, which he acknowledged will be “a little more complicated” given the revenue challenges created by the pandemic. The nonpartisan Office of Fiscal Analysis projects nearly a $30 million deficit in the current fiscal year general fund budget; a $757 million deficit in FY 2022; $1.2 billion in FY 2023; and $917 million in FY 2024 (WWLP). • According to the Office of Fiscal Analysis, Connecticut’s fixed costs such as Medicaid, debt service, and retiree benefits continue to grow faster than state revenue and make up 52% of the State’s budget. In FY 2021, the State will spend about $11.46 billion per year on its fixed costs between the General Fund and the Special Transportation Fund, but that estimate is projected

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to increase to approximately $13.54 billion by 2024, which it will then consume nearly 55% of the budget (Yankee Institute). • In November during his monthly financial and economic update, Comptroller Lembo projected a deficit of $1.26 billion for FY 2021, while noting economic improvement for some and a darkening reality for others (Office of the State Comptroller). • Connecticut finished FY 2020 with a $39 million surplus. The State is also preparing for a potentially large number of retirements by state employees because the annual cost-of-living adjustments on pensions will decrease for those retiring after July 2022. That could lead to reductions in the state workforce and additional savings for the budget. The General Assembly will not need to take any budgetary actions in the special session. Legislators will also not make any major changes to the police accountability bill that was passed less than two months ago (Hartford Courant). • Governor Ned Lamont announced a $43.5 million investment in remote learning solutions from CARES Act funds to close the digital divide and help students learn from home (State of Connecticut). • The Bond Commission approved nearly $550 million in financing for school construction, transportation and other capital projects (News Times). • The State sent $100 million in aid to hospitals (The Day) and distributed an additional $160 million in federal funds to help school districts safely reopen and cover costs related to the COVID-19 outbreak (Republican-American). • The State’s rainy-day fund has exceeded the legal limit for the first time in 19 years, approaching $3.1 billion and forcing Governor Lamont’s administration to release some of that bounty to pay down debt. New numbers from the administration show the reserve is enough to cover a huge budget deficit for the fiscal year that began in July and still leave about $1 billion in the bank next summer. State law caps the reserve at 15% of General Fund spending, which currently pegs the limit at just over $3 billion. The fund currently holds $76 million too much, which must be transferred into the State’s cash-starved pension programs for state employees and teachers. Connecticut now expects to have $942 million in its reserves entering summer 2021, and the administrations anticipates a $3.5 billion hole in the 2021-22 fiscal year (CT Post).

Delaware • Delaware reportedly spent 69% of the $927 million in funding allotted to the State from the $2 trillion March 2020 CARES Act. Delaware’s Department of Education, State Housing Authority, and State Fire Prevention Commission have all spent up to 95% of their funds (Bay to Bay News). • Delaware’s budget-writing panel resumed hearings the week of February 14, with several state agencies expected to appear before the joint financial committee. Hearings will continue into the third week of February, with the full Legislature set to return March 9. The meetings have proceeded quicker than expected this year, and the committee is on track to making significant steps towards a final spending plan for the fiscal year starting July 1 (Bay to Bay News). • Governor Carney credits budget practices in allowing the State to make it through the COVID-19 crisis. In his State of the State address, Carney remained upbeat and mentioned the decision to set aside a reserve fund was the reason Delaware has avoided a deficit. The reserve, plus the

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money received from the CARES Act allowed the State to see a budget surplus despite the ongoing pandemic (Delaware Business News). • Enrollment on Delaware’s Health Insurance Marketplace increased more than 5% during the open enrollment period that ended December 15. From November 1 through December 15, more than 25,000 Delaware residents signed up for 2021 coverage through the marketplace, which is an increase of 5.3% over last year’s open enrollment period. Last year, 23,981 people enrolled (Delaware.gov). • Delaware Care Collaboration (DCC), a Medicaid/CHIP Accountable Care Organization (ACO), will serve as a Delaware ACO. DCC will start to service patients as an ACO starting July 1, 2021 by partnering with Delaware’s Medicaid MCOs. Its goal is to improve health outcomes for Medicaid and CHIP members in the state (Delaware State News). • Despite fears COVID-19 would destroy state revenues and lead to higher taxes and fees, Delaware is on track to have a $149 million surplus for FY 2022 as of October 2020, mainly due to federal coronavirus aid, unemployment checks, personal income tax withholdings, lottery revenue, corporate franchise taxes and fees, and higher real estate transfer taxes (Town Square Delaware). • The State received more than $927 million in Coronavirus Relief Funds under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The State plans to spend $40 million from CARES Act funds to help residents who are struggling to pay rent or mortgages during the coronavirus pandemic. Other uses for the CARES Act funds include testing, contact tracing, and funds for essential childcare providers. Governor John Carney formally extended the state of emergency declaration another 30 days to confront community spread of COVID- 19 (Delaware.gov).

District of Columbia • D.C. Chief Financial Officer Jeffrey DeWitt revealed a $526 million budget surplus from FY 2020. The surplus comes from mostly higher than anticipated property and income tax revenues (DCist). • The Metro Board of Directors will move forward with its proposed budget. More than 40 public comments expressing concern were submitted before the approval (LocalDVM). • The Metro proposed a revised operating budget for FY 2021 with a nearly $500 million deficit. This budget includes closing Metrorail at 9 pm, ending weekend service, closing 19 rail stations, and reducing the number of trains. Metrobus service would be reduced to about 45% of pre- pandemic levels. The changes, if approved, would go into effective in July. The Metro’s FY 2022 budget includes salary freezes, layoffs, and deferring wage increases for union employees (WTOP). • D.C. Chief Financial Officer Jeffrey Dewitt announced he was increasing the FY 2020 revenue estimate by $222.1 million, due to the District bringing in more revenue over the last six months than expected. He is also lowering the FY 2021 revenue estimate by $221.9 million. An increase in individual income, due to unemployment benefits and the Payroll Protection Program. Those funds are reported on income taxes. There are predictions of reductions in real property tax in 2021 due to increased vacancies and rent concessions (The Patch). He also decreased the

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projects for the future years, FY 2022, FY 2023 and FY 2024 by $210 million, $190 million and $170 million, respectively (Bis Now). • The Washington Metropolitan Area Transit Authority (WMATA) faces $212 billion shortfall in fiscal year 2021. Ridership is down by 90% compared to last year. WMATA received $876 million from CARES Act, which helped prevent layoffs, but those funds will run out end of this year. WMATA needs about $250 billion to close the budget gap (DCist). • Washington D.C. thought of cutting $500 million from the upcoming year’s budget to offset a potential shortfall. Recently D.C. approved $8.5 billion budget for FY 2021, not anticipating revenue increases (DCist).

o Lawmakers raised $60 million in new revenue by increasing taxes in FY 2021 budget, but most of the increases came from freezing salaries and using reserves (DCist).

Florida • February 25 update: The Florida House plans to quickly pass the COVID-19 liability bill. Lawmakers are scheduled to meet March 4 and March 5 (Jacksonville Business Journal). • Governor DeSantis revealed his $96.6 budget proposal on January 28. The proposal includes increases in school spending, environment spending, and teacher pay raises. He is withdrawing $40 million from the Florida’s Schools of Hope program, publicly funded charter schools and recommends an average $233-per-student increase in school spending, to an average $8,019 for Florida’s 2.8 million students. Additionally, he proposed $550 million into raising minimum annual teacher salaries toward a goal of $47,500. He also did not recommend Medicaid rate cuts for nursing homes or hospitals in his plan. However, the governor vetoed $58.4 million in rate increases for community-based providers and instead recommended $36 million in rate increases for the institutional care facilities (Herald-Tribune, Florida Trend). • Florida’s unemployment rate has more than doubled due to COVID-19, which has increased Medicaid enrollment. The spike in unemployment and Medicaid enrollment have increased the State’s cost to participate in Medicaid by about $1.2 billion for the 2021-2022 budget year. Sales tax collections, the biggest source of general revenue, have been down, and it is unclear how the State will continue to pay to make up losses (Tallahassee Democrat). • Florida’s revenue for September were better than anticipated. General revenue for September was $230.2 million higher than the estimate that was issued in August. However, the State’s hospitality sector continues to struggle with a 6.8% decline in tax collections from last September. Sales taxes, which comes mostly from tourism and hospitality, are a key component of general revenue. Corporate income-tax collections were up $93.1 million from the forecast but were 24.6% down from last September (CBS Miami). • Rep. Chris Sprowls, who is in line to become speaker of the Florida House of Representatives in November, stated significant cuts to the budget will be needed to weather the financial hit COVID-19 has had on the State (Tampa Bay Times). • In August 2020, state economists estimated Florida will face a $5.4 billion deficit over the next two years. This is a 5.7% drop from budget estimates originally released in January. This could lead the State to call for a special session before the November election and address funding cuts to multiple safety net programs. The State has $4 billion in reserve funding to help

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address the shortfall, which lawmakers seem to think is sufficient to meet changed to the budget. To date the federal government has allotted Florida $5.8 billion in CARES Act funds (Tampa Bay Times).

Georgia • The mid-year budget that was approved also includes bonuses and raises for state employees and an increase in spending for schools and health care. State employees will receive a $1,000 bonus. The budget also includes funding to help nursing homes that are suffering due to COVID- 19 (The Atlanta Journal-Constitution). • The Georgia Senate passed the mid-year budget for this fiscal year with major increases to K-12 funding. Overall state spending has increased by $654 million. The state will pay for 500 new school buses and will backfill 60% of the spending reductions lawmakers approved last year. Further, the Senate approved expanding high-speed internet in rural areas and providing 10% raises for corrections and juvenile justice guards. However, Senate Minority Leader Gloria Butler, D-Stone Mountain, said the State should be prioritizing public health care and increasing funding and efforts to vaccinate teachers (The Atlanta Journal-Constitution). • State legislation has created a rural tax credit program that allows taxpayers the option to support a rural hospital in Georgia at no additional cost (WALB). • The Georgia Budget and Policy Institute released an overview of the State’s FY 2022 budget. Highlights include maintaining $697 million in education cuts and $283 million in health agencies cuts. • Senators Chuck Hufstetler, R-Rome; Jen Jordan, D-Atlanta; and House Minority Leader James Beverly, D-Macon, reported Georgia needs to reassess its tax incentive programs to ensure tax equity. So far, the State’s economy is operating at 89% of where it was prior to the COVID-19 pandemic, but tax refunds are expected to be higher this tax year. The State is considering tax credits to make up for losses. Hufstetler plans to propose to evaluate five of Georgia’s tax incentive programs and launch a two-year study on tax credits (The Center Square). • Governor Kemp announced Georgia will use federal CARES Act dollars to provide one-time bonuses of $1,000 for teachers and school staffers. His proposed spending plans for the rest of FY 2021 and FY 2022 would restore about 60% of what lawmakers cut from basic K-12 school funding in this year’s budget. Over two budget years, that would amount to about $1.2 billion. Governor Kemp proposed that Georgia borrow $883 million for construction projects and equipment next year. It is expected that the amount will increase. Further, he has proposed borrowing an additional $90 million to expand the state-owned convention center in Savannah, in addition to the $94 million that lawmakers have agreed to borrow since 2017 (The Atlanta Journal-Constitution, WSAV-TV). • Georgia schools will receive $2 billion in federal aid. Schools can decide what to use the funding on, and former U.S. Education Secretary Betsy DeVos advised schools use the stimulus on reopening classrooms. Governor Kemp will receive an additional $126 million for K-12 education later this year (The Atlanta Journal-Constitution). • Atlanta public schools plan to push for funding and flexibilities to respond to COVID-19 related challenges. The school district’s needs include smaller in-person classes, technology upgrades,

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and protective gear. The 2021 legislative session will convene on January 11 (The Atlanta Journal-Constitution). • November tax collections were up 8.3% from this time in 2019. To date, collections are about $551 million ahead from last year. In mid-January, Governor Kemp is expected to release his budget (The Atlanta Journal-Constitution).

o Governor Kemp is confident that Georgia will see a strong recovery in 2021, and he does not expect to propose additional budget cuts (The Atlanta Journal-Constitution). • Rep. Mary Margaret Oliver (D-Decatur) pre-filed three bills that would give counties and schools in Dekalb County more involvement in making decisions on behalf of Dekalb County. Oliver said, “I want us to have a focused discussion and strengthen the statues to allow for objections to annexations, review of bond validations with related tax abatement issues and increase transparency for all participants." The Legislature will review the current laws next session. The bills include:

o House Bill 23: would give local school systems affected by proposed annexations “standing and authority” to participate in dispute resolution proceedings.

o House Bill 24: would mandate cities inform their counties of any tax abatements or other financial incentives tied to proposed annexations and allow for county governments to use abatements or incentives that “affect county-wide taxes” as the basis for formal objections to proposed annexations.

o House Bill 25: would allow school systems be a part of bond validation hearings. • Tax revenues in October 2020 indicated Georgia’s economy has picked up since the start of the pandemic. Collections for October were up 1.8% or $35 million from last October. For the first four months of this fiscal year, collections were up 5.1% or $400 million (The Atlanta Journal- Constitution). • CMS approved Georgia's request to lower individual market insurance premiums by establishing a reinsurance program and enabling people to buy coverage directly through web brokers or insurance companies instead of HealthCare.gov. CMS stated premiums could drop by 13% on average starting in 2023. Additionally, Georgia requested a 1332 state innovation waiver to eliminate the healthcare.gov portal provided by ACA for people to purchase coverage (Modern Healthcare). • Governor Kemp announced he will commit $1.5 billion in federal pandemic relief money to support the fund that pays unemployment benefits. His goal is to continue paying benefits and keep the State from having to cut them, raise unemployment taxes, or take years to repay federal loans to the fund. State officials estimate that committing the $1.5 billion to paying off loans to the unemployment fund will save the average Georgia employer about $350 annually per employee. An additional $400 million from the federal fund will go to grants. The $1.5 billion will use up the largest chunk of the funds the State had left over from the CARES Act, if it all gets spent (The Atlanta Journal-Constitution).

Hawaii • February 25 update: The Hawaii Circuit Court is expected to pass a judgement soon on a case against the pharmaceutical companies Bristol-Myers Squibb and three U.S. subsidiaries of Sanofi

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that will require them to pay $834 million to the State for violating the State’s consumer protection laws regarding their blood-thinning medication Plavix. The penalty would go directly to the State’s general fund providing a major boost to the state’s depleted budget. The drug manufacturers are expected to appeal the judgement (Honolulu Civil Beat). • Hawaii’s Department of Education (DOE) will have a 2.5% budget cut instead of the 10% previously proposed in FY 2022 budget. The smaller cuts were announced based on the changes in the budget forecast due to the availability in additional federal funds and positive revenue projections by the Council of Revenues. Hawaii State Teachers Association (HSTA) voiced concern that nearly 700 teachers can lose their jobs even under the new 2.5% budget cut. The Board of Education also voiced concern but acknowledged the continued uncertainty about the DOE budget and is thus holding off on voting on the DOE plan on using $183 million in federal relief funds until the budget is finalized (Hawaii News Now). • House Speaker Scott Saiki proposed drastic budget cuts to the State’s Auditor Office, a watchdog agency that keeps other state agencies accountable on their performance and finances. The cuts proposed would halve the budget from $3.2 million to $1.52 million that would ultimately force the office to lay off analysts or transition them to part-time jobs. The proposed large budget cuts have led to speculation that Saiki is targeting the State Auditor personally for criticizing the performance of one or more state agencies. The auditor’s office is a legislative agency directly under the control of the State’s lawmakers who can order audits of various state agencies to help provide oversight. The auditor can be removed for a cause by the state legislature; however, that requires a two-thirds vote by the House and Senate (Honolulu Civil Beat). • Governor Ige is considering a wealth tax and higher tax on fuel to cover the $1.4 billion budget deficit. Other considerations noted by the governor’s office include halting general excise tax exemptions and credits. Meanwhile in the Legislature, Rep. Amy Perruso (D) plans on introducing a bill that would increase state income tax on high income residents. Rep. Perruso has also advocated for reducing the estate tax exemption and creating a property tax surcharge on homes values over $2 million to help pay for public schools (Star Advertiser). • Governor Ige proposed a $15 billion per year budget for its two-year state budget for fiscal years 2022-23, which is a 1.45% decrease from the fiscal 2021 budget. The proposed budget seeks to reduce operating and capital spending decreasing overall spending by 4.5% in fiscal 2022 and 3.1% in fiscal 2023. The proposal would also eliminate 550 vacant positions and 149 currently filled roles. Uncertainty remains, however, on whether there will be a tax increase and/or other revenue enhancements (Maui Now). • Starting January 1, 2021, more than 10,000 state employees will experience two unpaid furlough days per month resulting in pay cuts. Together with other measures, including reducing state agency budgets by at least 10%, the pay cuts are expected to help offset the State’s projected shortfall of $.1.4 billion (The Garden Island).

o Hawaii’s originally planned state furloughs of two days a month have been delayed after the passage of the federal coronavirus relief bill December (Star Advertiser). • On December 8, the Med-QUEST Division of the Hawaii Department of Human Services released the QUEST Integration Medicaid managed care Request for Proposal (RFP) for up to five health plans statewide to ensure access to care for Medicaid beneficiaries. Proposals are due February 15, 2021, and contracts will be awarded March 15, 2021. Previously, Hawaii awarded contracts to UnitedHealthcare, Centene/WellCare/Ohana, Alohacare, and Hawaii Medical Services

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Association. However, due to the COVID-19 pandemic, the Department of Human Services voided the awards and extended existing contracts (Hawaii.gov). • The Governor’s office requested that state agencies propose budget scenarios considering 10%, 15%, and 20% reductions. Agencies also are being asked to consider freezing positions of individuals who have retired. The Governor is aiming to reduce the state budget by $600 million (Hawaii News Now). • To address the budget shortfall resulting from the COVID-19 pandemic, Governor Ige proposed furloughing significant numbers of state staff and deferring payments over the next four years to the Hawaii Employer Union Health Benefits Trust Fund (EUTF). Furloughs may begin as early as December and could affect tens of thousands of employees. EUTF provides health and life insurance benefits for state employees (Hawaii News Now). • Like many other states, the Hawaii Department of Human Services reported Medicaid enrollment increased significantly over the last year by 13%. Loss of employer sponsored health coverage resulting from COVID-19-related job losses is the key component driving these numbers (Hawaii News Now). • Hawaii’s Council on Revenue (HCR), which prepares revenue estimates for each fiscal year, released an updated forecast on September 9. HCR is projecting state tax revenues for 2021 will be down by about $770 million or 11%, combined with a slower than anticipated rebound. • In addition to state agency budget cuts which included staff furloughs, the State plans to borrow between $750 million and $1 billion from the US treasury, though the loan would have to be repaid within three years. • In May 2020, Hawaii Med-QUEST, Hawaii’s Medicaid health insurance division, rescinded its new managed care contract awards totaling $17 billion and extended existing contracts (Honolulu Civil Beat).

o The new managed care awards were controversial because they reduced the number of health plans participating in Medicaid managed care.

o The focus is currently on public health and current services. o In the spring, Hawaii was reporting spikes in Medicaid applications and enrollments due to the pandemic (Hawaii News Now).

Idaho • February 25 update: During the February 4 Medicaid budget hearing, Governor Little withdrew the recommendation in the budget proposal for the next fiscal year to find $30.2 million in state General Fund savings in the Medicaid budget (~$118.4 million in total funds) (Health Leaders Media). • Governor Little aims to supplement the State’s rainy day fund by $500 million over the next two years. Idaho’s budget chief Alex Adams reported Idaho’s rainy day fund has $600 million as of January 2021 (PostRegister). • On January 11, Governor Little conducted his State of the State address, calling for reversing budget withholds, cutting taxes, and continuing to fight the COVID-19 pandemic. During this speech, Governor Little revealed his budget proposal for FY 2022 which focuses on investments

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in education, job growth, and economic opportunities. Highlights of Governor Little’s FY 2022 proposed budget include the following:

o Strengthening Public Health Response: The budget includes more than $250 million in total funds to address Idaho’s public health infrastructure and to respond to the COVID- 19 pandemic.

o Medicaid Expansion: The budget recommendation continues to implement Medicaid expansion under Prop 2. Due to an increase in enrollment and per member per month (PMPM) costs, it will not be possible to implement with a net-zero impact on the General Fund. The proposed budget includes a recommendation that there is a $12.5 million cost-share with counties to capture the savings counties have experienced due to Medicaid expansion.

o Increased Medical Residency Capacity: The Governor recommends $900,000 for 15 new medical residents to address a physician shortage in the state. The proposed budget stipulates the continuation of the 10-year GME plan.

o Invest in Economic Stimulus Projects: The proposed budget includes Governor Little’s Building Idaho’s Future investment package that reinvests $322 million in the General Fund and $35 million in federal funds to make improvements to infrastructure (e.g., roads, bridges, rail, water, broadband). The goal of this economic stimulus is to get Idahoans back to work that make long-lasting contributions to Idaho’s economic prosperity.

o Tax Relief: The proposed budget has more than $455 million in tax relief for Idaho families and small businesses (Idaho.gov). • Governor Brad Little proposed tax cuts to lawmakers in education, transportation, and water projects. The State’s projected budget surplus is around $630 million; however, Little warns that tax cuts and investments are threatened if the spread of COVID-19 worsens and overwhelms the hospitals (KTVB). • In December, Idaho had a little more than $600 million in its rainy day fund. These funds will be “metered out” over the next three to four years to subvert the negative impacts related to the COVID-19 pandemic. Since the start of the COVID-19 PHE, Idaho’s revenues did not fall as much as previously anticipated (e.g., curbed state expenditures, lower law enforcement costs, increased FMAP). The State’s budget director Alex Adams explained the State was in a budget surplus position; however, it is likely a one-time event rather than ongoing funding (Idaho Press). • Idaho is one of five states (additionally, Iowa, Missouri, Oregon, and Vermont) that have apportioned Coronavirus Relief Funding (CRF) dollars towards broadband grants to address connectivity needs including telehealth (The Pew Charitable Trusts). • On October 26, Governor Little signed a statewide public health order moving Idaho back to a modified Stage 3 of the Idaho Rebounds plan. Health care facilities throughout the State are facing alarming demands and capacity constraints as Idaho faces record daily cases and deaths (Johns Hopkins, Coronavirus Resource Center). • Lawmakers reviewed the state agency budget request in October at the Joint Finance- Appropriations Committee meeting and so far, there are fewer than normal requests. Legislative Budget Director, Paul Headlee stated that there are usually “about 400 new line item requests

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each year... and this year, there’s 113.” All new proposed items are estimated to cost the $447,200 toward the state general fund (typically closer to $100 million).

o In October, the State’s Budget Stabilization Fund, aka rainy day fund, had the highest amount of funds since it was created in 1984 with $423.4 million (The Spokesman- Review). • The State Board of Education approved a budget revision for FY 2022 that aims to bring more physicians to Idaho. This request includes a $900,000 expansion to the Board of Education’s 10- year graduate medical education (GME). This GME request went to the legislature in January 2021 (Argus Observer).

Illinois • Governor Pritzker warned that the State faces a budget deficit over the next five years. Cuts alone will not solve the problem, so new revenue sources must be explored. The projected backlog of bills for payments owed to state vendors that was expected to reach $10.2 billion on June 30 will now almost triple to $33.2 billion in the 2026 budget year, according to the most recent five-year forecast from the governor’s budget office. Governor Pritzker’s agency directors already have been asked to come up with 5% cuts in their current-year budgets (Chicago Tribune). • Chicago Mayor Lightfoot proposed a budget that includes property tax hikes, gas tax hikes, personnel reductions, and debt refinancing. Specifically, personnel reductions would save about $106.3 million through 350 layoffs and 1,912 vacancies left unfilled. Mayor Lightfoot is also asking all non-union employees to take five unpaid furlough days (Illinois Policy). • Illinois collected more than $100 million in recreational marijuana tax revenue since legalizing sales the beginning of 2020. Recreational dispensaries sold more than $68 million worth of marijuana in September, exceeding the previous month’s sales by about $4 million (Chicago Tribune).

Indiana • Indiana lawmakers proposed an increase on the State’s cigarette tax. The tax would increase by $1 to the State’s current 99.5 cents per pack cigarette tax and would charge a 39% tax on vaping liquids. About 56% of the revenue would go to the state general fund, thus generating about $160 million annually over two years (Martinsville Bulletin, The Journal Gazette). • Indiana conducted a two-year revenue forecast in December that projected the State will collect about $35 billion in tax revenue between July 1, 2021 and June 30, 2023. That is nearly equal to the $34.6 billion in spending in the current two-year budget, which does not allow much room for increases in school funding or pay raises for teachers (The Times of Northwest Indiana). • The Indiana County Board of Commissioners proposed a 10% increase in the county-level real estate tax, which would be the first tax hike since 2013, as part of the proposed $45.2 million budget for 2021. The county would raise $41.5 million of new revenue, including $2.2 million from the property tax increase. The proposed spending reflects a drop of nearly $800,000 from

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this fiscal year. With this property tax increase, the owner of a property of average value would be billed $48.76 more (The Indiana Gazette).

Iowa • February 25 update: Iowa Legislature started negotiations in early February regarding K-12 education. Majority Republicans proposed a 2.5% increase in general fund state aid for elementary and secondary schools, which was passed by the legislature. The bill would add $179 to the cost per student and increase the State’s general fund appropriation to schools and area education agencies (Sioux City Journal, Des Moines Register). • Michael Bousselot has been appointed as the new Iowa Department of Management Director. Bousselot is the former Chief of Staff to former Iowa Governor Terry Branstad (Sioux City Journal). • Governor Reynolds would like schools to require 100% in-person learning to give parents the choice to send their children back to school. She proposed expanding options for parents by making open enrollment available for every district. Further, Governor Reynolds proposed providing parents “education savings accounts,” which parents could use to help fund their children’s private education. The accounts would be funded by the State; those who oppose this proposal argue that the savings accounts would take more money from public schools and students (Des Moines Register). • Lawmakers are focusing on broadband access and will continue to push additional funding for high-speed broadband internet across the state. House Speaker Pat Grassley recently created a new Information Technology Committee in the House to address infrastructure issues. Last year, Governor Reynolds sought $15 million for broadband expansion. Lawmakers expect Governor Reynolds to once again push for more funding on broadband expansion, particularly in rural areas (Waterloo-Cedar Falls Courier). • In January 2021, state revenue projectors estimated state tax collections will increase by 3.7% this upcoming budget cycle. Legislators have indicated that they do not yet know the total financial impact COVID-19 has on the State, so they recommend taking a conservative approach to setting spending levels. Governor Reynolds has said she believes it is too soon to consider using state reserves and that the State should continue to see what the impact is to revenues (Daily Nonpareil). • In December 2020, state budget experts believed revenue will increase very slowly through next year as the economy tries to recover from COVID-19. The three-member Revenue Estimating Conference increased revenue projections for FY 2021 by $38.7 million, or 0.5% above the current year, which is an extremely small increase. The three-member panel also estimated that the State will bring in about $8.26 billion for FY 2021. Although the State regained about half of the jobs it lost during the pandemic, it is still approximately 75,000 jobs below where it was in 2019 (Associated Press). • Previously Governor Reynolds proposed her “Invest in Iowa” plan, which seeks a 1% sales tax increase and cuts state income taxes by 10%. Part of the revenue from this plan would help fund water quality and environmental efforts. The sales tax increase and state income tax reduction are estimated to generate about $540 million annually, with more than $80 million going toward mental health care efforts (The Quad City Times).

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• In December, the city of Des Moines anticipated it will lose about $25 million in revenue in FY 2021 due to COVID-19. Because of the pandemic, tourism and shopping have gone down significantly, reflecting a sales tax revenue decrease of more than $13 million. Gas tax revenue was also down by more than $1 million. City Manager Scott Sanders stated he does not anticipate any job or service cuts next fiscal year, but capital spending will be scaled back (KCCI). • Iowa’s Board of Regents will continue to freeze public university tuition this Spring due to the ongoing COVID-19 pandemic. This decision leaves the 2020-21 academic year baseline tuition rate for resident undergraduates at $8,073 at the University of Iowa, $8,042 at Iowa State University, and $7,665 at the University of Northern Iowa (The Gazette). • Iowa launched a new County Fairs Relief Program, an extension of the Small Business Relief Program. Iowa allocated $6 million of the CARES Act funding for this program. This program continues to assist county and district fairs with operations. The amount rewarded will be based on revenue loss from October 1, 2019 through September 30, 2020 (KCRG). • In October, state experts predicted revenue would grow by 4% or $319 million next fiscal year, which gives the State about $8 million to spend. Experts also predict revenues to be $1.9 million less than last fiscal year and have revised their total estimate to $7.91 billion (KGAN CBS). • State closed FY 2020 budget with $305.5 million surplus with billions of federal stimulus dollars. This year’s surplus was nearly $17 million higher than last year’s fiscal surplus. The State’s cash reserves are over $770 million (Quad City Times). • Iowa Board of Regents approved FY 2022 budget, which shows significant decreases from 2021: $7 million for Iowa State University and University of Iowa; $4 million for University of Northern Iowa; $242,000 for Iowa School for the Deaf; $102,000 for Educational Services for the Blind and Visually Impaired; and $41,000 for Iowa Public Radio. The budget also includes increased funding of $26.4 million from the General Fund Education Appropriates budget, which includes restoration of FY 2021 $8 million reduction (We Are Iowa). • In July 2020, State lost over $5 billion due to the pandemic, and there were many lay- offs/furloughs. Prior to COVID-19, State had $800 million in reserves and a projected budget surplus of nearly $400 million (The Gazette).

Kansas • February 25 update: The Kansas House proposed an amendment that would require colleges and universities to provide tuition rebates to students who switched to remote learning during the pandemic. The amendment will require six state universities to provide students with a 100% tuition rebate for online courses and a 50% tuition refund for days cut from the academic calendar as a result of the pandemic (The College Post). • Governor Kelly proposed taxing streaming services like Netflix and Hulu and online market facilitators such as Etsy to generate additional state revenue. The digital sales tax would generate about $42.7 million annually, and the online market facilitators tax would bring in about $43.1 million annually. The revenue would go toward the State’s efforts to expand broadband access and other public services (The Wichita Eagle).

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• The State’s total tax receipts for October were $596.6 million, an 11.7% or $62.6 million increase over the estimate. Individual income tax collections were also up from the estimate by 9.1% or $23.6 million (Fort Scott Biz). • In June 2020, the State anticipated an estimated shortfall between $600-$700 million for FY 2021. Governor Kelly’s budget-balancing plan included $40 million in spending cuts (US News).

Kentucky • February 25 update: Kentucky senators have filed a bill that would create a special taxing district in west Louisville to boost economic growth, specifically home ownership and retention. 80% of the tax revenue growth would go to economic development projects over a 30-year duration of the tax-increment financing. The tax revenue is estimated to total as much as $1 billion. Property tax payments would be frozen at their 2021 levels for the duration of the tax- increment financing for those who own property in west Louisville (WDRB). • The Kentucky General Assembly reconvened the first week of February to create a new state budget and plan to override Governor Beshear’s vetoes. Lawmakers will decide on bills that would change pension benefits for new teachers, ban LGBTQ conversion therapy, and reform the criminal justice system (WFPL). • Governor Beshear proposed a budget plan that includes additional aid to combat COVID-19, as well as salary increases for teaching and an increase in public education funding. He also called for state employee pay raises, full funding for Medicaid, and staffing to combat child abuse. His virus relief bill includes $220 million for small businesses, $20 million for non-profits, and $101 million for a federal loan that helped keep the State’s unemployment insurance program afloat. Additionally, Governor Beshear would allocate $48 million to help the State’s unemployed worked. Each eligible individual will receive $1,000 (WAVE). • Governor Beshear relaunched Kynect, a state-run web portal designed to help Kentuckians sign up for health coverage and other assistance programs. The program provides access to the national health benefit exchange, but by January 2022 it is expected to switch back to a state- run exchange program where people can shop for health coverage, saving an estimated $15 million a year for Kentuckians (Modern Healthcare). • Governor Beshear was able to escape FY 2020 with no budget deficit but expects to face a $1.1 billion shortfall for FY 2021. The State ended FY 2020 with a $177 million surplus, most of which will be added to the State’s rainy-day fund. In the fourth quarter of 2020, over $18 million in spending was cut, including $7.2 million from the Health and Family Services Cabinet (Lexington Herald Leader). • State budget director John Hicks said General Fund receipts in August increased 5.9% compared to the same period a year ago. He says revenues for the month totaled $833.8 million, compared to $787.2 million during August 2019 (WNKY).

Louisiana • February 25 update: Jay Dardenne, the Commissioner of Administration for Governor Edwards, plans to present a budget proposal at the end of February that includes spending cuts based on

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current revenue projections. The Louisiana Revenue Estimating Committee projected the state will have $228 million less than originally anticipated in FY 2022 (The News Star). • In January, estimates showed that Louisiana’s shortfall for the upcoming budget year could be as high as $962 million. Although the State is expected to collect more tax revenue next year, the revenue alone will not be sufficient to cover the losses, specifically the federal COVID-19 aid Governor Edwards and lawmakers used. The State has about $293 million in cash from this year which could help cover some of next year’s expenses. Further, the State is expected to receive new federal aid that Congress passed in December (Baton Rouge Business Report). • State Rep. Jack McFarland in Louisiana will propose the Government Reform in Transportation (GRIT) Act in April, which would raise the State’s gas tax by 10 cents in the first year. This tax increase would help reduce the State’s $14 billion infrastructure backlog. The tax rate has remained untouched for 30 years. Projections show that this tax increase would generate about $300 million in revenue for the Department of Transportation and Development the first year, and 60% would fund maintenance projects for existing roads and bridges, and 40% would go to new projects (KTVE). • The Louisiana Department of Health (LDH) will issue a Request for Proposal (RFP) in Spring 2021 for providing Medicaid managed care services. The public comment period is currently open until December 29, 2020 (Louisiana Department of Health). • The State will run out of COVID-19 federal aid in 2020 before it pays out grants to all eligible small businesses and local government agencies seeking funds from COVID-19 aid programs. Officials running the COVID-19 aid programs announced that they received more applications than the funding available. About $855 million remaining was split by lawmakers among several assistance programs:

o $525 million to reimburse local government agencies' virus-related expenses o $260 million for small business grants o $50 million for one-time payments of $250 to front-line workers who stayed on the job in the beginning of the pandemic

o $20 million to pay for administrative expenses to run those programs o Although $50 million was allocated to hazard pay for front-line workers, more than $2 million won't be spent on the $250 checks because thousands of applicants did not meet the income and job eligibility requirements set by lawmakers (Tulsa World). • To provide some relief to residents affected by COVID-19, the State had a one-time statewide sales tax holiday from November 20-21. The sales tax holiday exempts the first $2,500 of most in-person, online, or over-the-phone purchases from the State's 4.45% sales tax (Daily Advertiser).

Maine • February 25 update: Governor Mills delivered her State of the Budget address on February 23 and discussed the economic impact of the COVID-19 and her plans for Maine’s recovery. Part of her $8.4 billion spending proposal that she introduced earlier this year includes $45 million in

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new funding for K-12 public education and $5 million for efforts combatting COVID-19 (The Center Square). • Hospitals are concerned that Governor Mills’ proposed supplemental payment budget will drastically impact their reimbursement. Earlier, the governor proposed a $300,000 cut to payments hospitals receive for outpatient services. In response to the proposal, Jeff Austin of the Maine Hospital Association stated, “The cut actually total is carried forward into the biennium. When this is fully implemented, this is a $7 million-a-year cut.” With the pandemic, hospital budgets have suffered about $650 million in losses (Maine Public). • If the State follows the updated federal tax code passed by Congress in December, it can face up to a $100 million shortfall; under the changes passed in December, small businesses that received Paycheck Protection Program (PPP) loans might not be able to deduct expenses paid with forgivable federal PPP loans under the state tax law. Representatives for the Maine State Chamber of Commerce and the National Federation of Small Businesses and Hospitality Maine urged lawmakers to match the latest federal law that not only exempts PPP loans from taxation but also allows businesses to deduct the costs paid by PPP loans (Press Herald). • Governor Mills released her two-year $8.4 billion budget proposal which includes funding for the Maine Center for Disease Control and Prevention, funding for mental health and substance use disorder services, broadband expansion, and funding for public education. More details on the budgets can be found here. There are no cuts to critical services and no changes to tax rates. Additionally, Governor Mills’ proposal does not dip into the State’s rainy day fund or seek additional avenues to respond to the PHE. Her plan focuses on combatting the pandemic by continuing to rebuild Maine’s public health infrastructure and protecting essential and life- saving services, such as education and health care (News Center Maine, Maine Beacon). • Several transit agencies in southern Maine will receive a total off $11.1 million in federal aid. About $9 million will be for lost revenues. The rest will be split among sanitation and projects to increase ridership (Mainebiz). • Maine lawmakers reconvened in January to discuss balancing the State’s budget. Republicans and Democrats have agreed to create a new two-year spending plan. As of January 2021, Maine faces a $150 million deficit (Seacoast Online). • The Mills administration announced they have used all of the $1.25 billion CARES Act funding. The remaining $6.8 million will fund the public-private partnership with Westbrook-based IDEXX Laboratories for COVID-19 testing (News Center Maine). • Governor Mills and Maine DHHS Commissioner Jeanne Lambrew announced Maine Health Care Financial Relief Program, a new grant program that will support Maine health care organizations that serve residents with MaineCare and sustain vital health services during the COVID-19 pandemic. Eligible organizations include hospitals and nursing facilities, as well as congregate care, behavioral health, community service providers, and other providers with more than 250 employees. The grants will provide up to $100,000 for health care organization that have incurred business disruptions as a result of the pandemic (News Center Maine). • Governor Mills rolled out a program to support hospitality and tourism in the state, as well as help small businesses. The $40 million program, the Tourism, Hospitality & Recovery Grant Program, will evaluate need of small businesses based on gross sales loss between March and

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September 2020 compared to the same time in 2019. The grants could cover payroll loss, rent, utilities, operating expenses, and more (News Center Maine). • Commissioners appointed by Governor Mills asked that she double state public defense agency Maine Commission on Indigent Legal Services’ (MCILS) budget to $35 million annually after a report that found MCILS failed to provide high-quality legal representation was released. Mills stated that increasing the funding during a pandemic will not increase the quality or accountability of MCILS (ProPublica). • Governor Mills asked state department heads to identify 10% cost reductions in their agencies by August 19. She prepared to propose a reduction package to Legislature. State is facing a projected $1.4 billion revenue shortfall over the next three years due to the pandemic with $524 million falling within the budget year ending June 30, 2021 (Bangor Daily News).

Maryland • Governor Hogan signed the RELIEF Act of 2021 into law this week. The emergency legislation will immediately provide more than $1 billion in tax relief and economic stimulation to Maryland. Any state residents currently unemployed will not have to pay any taxes on their unemployment benefits, and tax relief for small businesses will allow them to keep up to $9,000 over the next 90 days to keep doors open. Direct relief checks are also set to be distributed to about 400,000 low-income residents (CBS Baltimore). • Democratic senators asked to add an additional $520 million to Governor Hogan’s $1 billion pandemic relief plan. The Senate’s plan, “Recovery Now,” will fund food banks and emergency responders, clear rental debt for families, award grants for businesses, pay more to those on unemployment, and restore the public transportation system. While Governor Hogan’s RELIEF Act already includes the allocation of funds to improving residents' lives, Democratic senators believe this additional funding, taken from the rainy-day fund, will go much further in the State’s recovery (The Baltimore Sun). • Governor Larry Hogan previewed his FY 2022 spending plan, which he said provides immediate tax and economic relief to families and businesses in need, makes record investments in top priorities, and lays a fiscally responsible foundation for a strong recovery (Maryland.gov). • Among the highlights of the governor’s proposal were $7.5 billion for K-12 education, $833 million in school construction funding, $1 billion in direct stimulus and tax relief through the recently announced RELIEF Act, more than $1 billion for roads and highways, and $964 million for mass transit improvements. The governor also announced $213.7 million in hold-harmless education grants to address fluctuations in school enrollment amid the pandemic (Conduit Street). • In January, Governor Hogan asked lawmakers to approve a state COVID-19 relief package, the “RELIEF Act,” which is comprised of individual payments for low-income residents, additional help for small businesses, and tax cuts that will cost up to $1 billion. Additionally, Hogan proposed the elimination of residents on unemployment benefits paying local and state income taxes (The Baltimore Sun). • On December 17, Governor Hogan announced Medicaid behavioral health and long term care provider rate increases pursuant to Maryland Senate Bill 280 (2019) will go into effect January 1,

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2021, rather than July 1, 2021. The Department will make the following updates to provider rates included in Maryland’s State Plan (Maryland.gov). • The Board of Revenue Estimates (BRE) increased revenue projections for FY 2021 by 0.3% to $18.8 billion, representing a $64 million increase from the September estimates. The Board also revised the projection for FY 2022 to $19.8 billion, which is a 0.7%, or $143 million increase above the September estimates.

Massachusetts • Governor Baker unveiled his $46.6 billion state budget for FY 2022. The proposed budget has several goals:

o Maintain pre-COVID-19 eligibility and benefit levels in social safety net programs. o No tax increases for state residents. o Fully fund the first year of Student Opportunity Act. o Withdraw from rainy day fund to ease financial strains caused by pandemic. o Increase funding for early childhood education programs. o Double the budget for Massachusetts Emergency Management Agency (St. Louis Post- Dispatch). • State tax collections increased by more than 8% as taxpayers and businesses continued to create more revenue for the state government than expected. In addition to signing a $45.9 billion 2021 fiscal year budget, Governor Baker’s budget office also increased its tax revenue projections (The Berkshire Eagle). • Governor Baker signed into law on January 1, 2021, a multi-faceted health care bill that requires insurance companies to cover telehealth visits the same way they cover in-person care, and provides a short-term model for how those services will be paid (WBUR). • Governor Baker signed off on the State’s $45.9 billion budget on December 11, five months after the fiscal year started. Governor Baker sent back amendments attempting to set aside significant clauses that would expand access to abortions. Baker, a Republican who generally supports abortion, endorsed several “important changes to protect a women’s reproductive rights” (Boston Herald). • MassHealth is preparing to submit a renewal request of its Medicaid 1115 Demonstration Waiver, which is set to expire June 30, 2022. MassHealth is seeking public comments on December 17 from 12:00 – 1:30pm ET. Prior to submission to CMS, stakeholders will have an opportunity to offer public comments on a draft of the waiver. • The Massachusetts House passed the $46 Billion Budget which includes expanded access to reproductive health care in Massachusetts, stays away from new broad-based taxes, and draws $1.5 billion from the state's "rainy day" fund. Specifically, the State adopted an amendment that will allow abortions after 24 weeks in the case of lethal fetal anomalies and lower the age from 18 to 16 that a minor can choose to have an abortion without parental or judicial consent (WBUR). • The Massachusetts government has been operating under temporary budget since FY 2021 began. The Governor signed a third interim budget into law on October 26, authorizing $5.4

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billion to maintain services after the previous interim budget expired on October 31. The interim budget will expire when the FY21 General Appropriations Act passes (MAPC). • The State’s Department of Revenue (DOR) Commissioner Geoffrey Snyder announced September revenue collections were 1.4% less than actual collections in September 2019. However, FY 2021 year-to-date collections total approximately 1% more than collections in the same period of FY 2020. These current estimates are still preliminary, and the Department cautioned that September monthly and year-to-date figures should be interpreted with caution (Mass.gov). • The governor signed a temporary budget through October 31 to allow for more information on possible additional federal aid and the amount of revenue from the delayed tax deadline (NASBO).

Michigan • Governor Whitmer’s proposed budget calls for increases to more than 140 fees for state government services such as getting a permit to develop areas designated for wetlands. The Department of Environment, Great Lakes and Energy would also increase a range of fees related to operator certification, hazardous waste, land and water resources, discharges from waterways, and storm water systems. If approved, the proposed fee increases would generate an additional $27.6 million annually. Some of the increases related to government services include the following:

o The fee to get a traffic crash report from the Michigan State Police would increase to $15 from $10.

o The fee the Department of State charges businesses to look up a motorist's driving record would increase to $15 from $11.

o The Department of Labor and Economic Opportunity would impose 20% increases — ranging from $9 to $237 — on eight different fees related to X-rays and mammography (Detroit Free Press). • Governor Whitmer revealed a $5.6 billion COVID-19 recovery plan that includes funding for schools, economic development programs, and unemployment benefits. About 90% of the budget plan will come from the federal government. Congress appropriated about $90 million for COVID-19 vaccinations and $575 million for testing and tracing. Additionally, $225 million was allocated for programs at the Michigan Economic Development Corp. These funds will go to grants for high-tech startups, restaurants, and other small businesses. Further, the plan includes a combination of $1.7 billion of federal aid and $300 million from the State for schools (The Detroit News). • The Pure Michigan Small Business Relief Initiative, a grant program, will provide $10 million in grants from the CARES Act to small businesses impacted by the COVID-19 pandemic. Applications will be open December 15. • City leaders in Michigan are seeking ways to generate more tax revenue to offset some losses as a result of the pandemic. A proposed solution would include a one-time exception to Michigan’s city income tax laws and potential permanent changes to Michigan's property tax caps. The State faces a $1 billion shortfall next year without additional sources to close the financial gap.

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Further, some cities implemented short-term hiring freezes that have helped to delay layoffs (The Detroit News). • Governor Whitmer signed the FY 2021 budget that is estimated to spend $63 billion. The spending plan includes only $250 million in overall cuts. The plan also includes a $900 million increase for Medicaid costs – $100 million of that is state general revenue. Additionally, the budget includes $994 million for Healthy Michigan, which is the State’s ACA expansion – $122 million of that is state general revenue (Detroit Free Press).

Minnesota • February 25 update: Governor Walz expressed he predicts the state surplus will grow based on higher than anticipated tax collections. Tax collections for January were up $296 million than projected (MinnPost). • Governor Walz unveiled his budget proposal which includes a wealth tax, increased spending for education, and one-time payments for low-income working families. The State is facing a $1.3 billion gap over the next two years. The tax increase would apply only to the wealthiest Minnesota residents and large companies; specifically, it would raise the taxes of married couples earning more than $1 million and individuals earning more than $500,000. He has also allocated $745 million for K-12 schools, in addition to recent federal aid of $649 million for schools. Additionally, the governor proposed one-time payments of up to $750 to about 32,400 working poor families who participate in the Minnesota Family Investment Program and $50 million for a new small business forgivable loan program (KSTP). • In December, state officials confirmed the budget forecast for Minnesota projects a $641 million surplus due to higher general fund revenues and lower expected spending (MinnPost). • The Minnesota House passed a $1.9 billion public works infrastructure package that would authorize borrowing for statewide construction projects. This could potentially create thousands of jobs. This bill also contains a GOP-backed tax cut that would benefit farmers and businesses making equipment purchases (Star Tribune).

Mississippi • February 25 update: Mississippi brought in more than $75 million in revenue from the state lottery since July 2020. The State plans to use the first $80 million for funding highway construction and maintenance. The next $80 million in revenue will go to education (Jackson Free Press). • Sen. Neil Whaley, R-Potts Camp proposed a bill at the end of January that would privatize at least 10 Mississippi state parks. Some oppose the bill, arguing that it would be expensive to maintain and control state parks. Brookhaven Republican Becky Currie and two others introduced House Bill 152, which would use a small percentage of the lottery revenue to help fund improve the parks system (Northeast Mississippi Daily Journal).

o Lawmakers have put legislation on hold regarding privatizing state parks, stating they need to conduct more research (Northeast Mississippi Daily Journal). • The Joint Legislative Budget Committee released the proposed budget recommendations for FY 2022. Currently, the General Fund revenue sits at $5.75 billion, and the funds available for FY

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2022 are $53.6 million more than General Funds appropriated for 2021. The Committee’s recommendations include defunding most vacant positions, eliminating more than 4,000 vacant positions, reducing travel and contractual services funding, and eliminating funds for one-time expenditures.

Missouri • February 25 update: Missouri lawmakers proposed using some of the unspent COVID-19 relief aid to offset the amount of money Missouri paid to about 45,000 unemployed people who were later found unqualified to receive the payments. The Missouri Department of Labor was trying to collect the $150 million overpayments from the Missouri residents, which caused an outrage (St. Louis Post-Dispatch). • Governor Parson revealed his $34.1 billion budget which is partly comprised of savings secured from the CARES Act funds. He has allocated about $14 billion for Medicaid expansion; Medicaid expansion was approved by voters last summer. Additionally, the governor allocated about $3.6 billion for K-12 public schools (Washington Examiner, News Tribune). • Missouri is one of five states (additionally, Idaho, Iowa, Oregon, and Vermont) that have apportioned Coronavirus Relief Funding (CRF) dollars towards broadband grants to address connectivity needs including telehealth. Missouri has dedicated $5.25 million of CRF dollars toward purchasing 12,500 hotspots for Federally Qualified Health Centers (FQHCs) and Community Mental Health Centers. The purpose of these hotspots is to support access to telehealth services for vulnerable populations (The Pew Charitable Trusts). • With Missouri’s economy rebounding better than projected, Governor Parson restored $133 million of the $448 million budget cut that went into effect on July 1. The $133 million included $38 million in general revenues and $94 million in approved federal funding.

o In June, the projected unemployment rate in October was 16.3%, but it stood at about 7% in October 2020. Since March 2020, 200,000 of 346,000 jobs have been recovered.

o In September 2020, general revenues were 3% more than what was collected in 2019 ($944 million and $917 million, respectively) (The Center Square). • On August 4, Missourians voted to approve Medicaid expansion in the State after a decade of repeated rejection of proposals by the Legislature (Modern Healthcare). • In June 2020, Governor Parson announced another round of expenditure restrictions of $209 million due to COVID-19 (MO.gov). • Governor Parson signed Missouri’s $35 billion spending plan for FY 2021 and restricted an additional $448 million in spending to balance the State’s fiscal 2021 budget (St. Louis Post- Dispatch).

Montana • February 25 update: Manatt published “Medicaid in Montana: How Medicaid Affects Montana’s State Budget, Economy and Health,” commissioned by the Montana Healthcare Foundation to provide an analysis of Montana’s Medicaid program, beneficiaries and costs, impacts on the health system, and health outcomes. Key findings from the report include:

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o Medicaid helped half of the uninsured Montanans. o Montanans used Medicaid to prevent serious illness, access treatment for mental health issues, and substance use disorders.

o Medicaid provided a safety net during the COVID-19 pandemic. o Medicaid expansion supports a healthy workforce, local businesses, and tribal communities (Manatt). • In late January, Governor Gianforte delivered his State of the State address to a joint session of the Montana Legislature. Gianforte’s expressed that Montana is “resilient.” Highlights in Gianforte’s address include efficient vaccine acquisition and distribution and utilizing recreational marijuana tax revenue to combat the drug epidemic (Montana.Gov). • In early January, Governor Gianforte released the proposed 2023 biennium budget (“Roadmap to the Montana Comeback”). Governor Gianforte’s proposed budget aims to control state spending and reduce overspending (Montana.Gov). • On January 5, Governor Greg Gianforte (R) took the oath of office as the State’s 25th governor (Montana.Gov). • Former Governor Steve Bullock’s final budget proposal for the 2023 biennium focused on protecting essential services and investing in economic recovery and education. This budget plan included increases in funding for mental health services for the Department of Correction, suicide prevention funding, economic development of Indian Country, and language preservation services. The proposed budget fully funds Medicaid expansion to ensure Montanans have health care coverage up to 138% FPL (Montana.Gov). • On November 20, former Governor Bullock reported the State’s unemployment rate decreased to 4.9% in October 2020. Montana’s unemployment rate is lower than the national average of 6.9% (Montana.Gov). • In October 2020, Governor Bullock reported that hospitals will begin to report capacity, and funds were announced to boost the unemployment insurance trust fund due to steadily rising cases of COVID-19. To immediately boost trust funding, $200 million was announced that effectively doubled Montana’s unemployment insurance trust fund (Montana.Gov). • The State is considering legalizing recreational marijuana, as a report from The Bureau of Business & Economic Research at the University of Montana shows a significant boost in tax revenue, generating anywhere from $43 million to $52 million annually at a 20% tax rate. The report also shows that tourism is a significant source of that tax revenue (KPAX). • Despite projecting a $253 million shortfall through FY 2023, former Governor Bullock said the State is fiscally strong and that $46.7 million was transferred into the fire suppression fund, putting it at its statutory cap of $101.5 million for the first time in state history. In August 2020, Montana had $620 million in reserves. General fund balance was estimated at $452 million, which was enough to cover the decreased revenues (Great Falls Tribune).

Nebraska • Governor Ricketts released a two-year budget plan on January 14 that fully funds the University of Nebraska’s appropriations request for 2021-2023. The University will receive a 2% increase in state funds which will help cover expenses. Further, the proposed budget includes a $1 million

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annual increase for the Nebraska Opportunity Grant program, which will help some University of Nebraska’s students (University of Nebraska-Lincoln).

o Part of the governor’s budget plan also includes a property tax relief initiative. He proposed limiting spending to a growth rate of 1.5% and limiting the growth of local government property taxes to 3%. Other initiatives he proposed are focused on veterans, such as exempting 100% of military retirement income for military retirees and helping military spouses who have teaching licenses find work (KRVN). • Nebraska’s tax revenue in December was less than anticipated. The Nebraska Department of Revenue reported tax receipts of $436 million, and the anticipated revenue was $440 million, falling short of $4 million. However, the State still has collected more revenue than expected in the current fiscal year (3 News Now). • Senator Tom Brewer will propose (Proposal LR13CA) a limit on how much public schools in Nebraska can collect in property taxes. The proposal caps property taxes at no more than 33% of a school district’s total funding. Currently, about 40% of school funding comes from property taxes in the State. If approved, the cap would create a $670 million shortfall, which the Legislature will need to come up with a plan to fill (Lincoln Journal Star). • Nebraska’s new income tax credit for property owners will equal 6% of their 2020-2021 school property tax bills (Kearney Hub). • State lawmakers reconvened on January 6 to discuss priorities including property tax relief. During the last session in 2020, lawmakers agreed to increase property taxes by $125 million. Nebraska residents can begin to apply for a property tax credit in February (KOLN). • Several CARES Act grant applicants in Nebraska hit a glitch, so their applications were not saved in the system and therefore could not receive the grant. Governor Ricketts stated that The Nebraska Department of Economic Development and Deloitte are following up with those applicants. Additionally, Governor Ricketts signed an executive order extending licensing allowance for health care professionals until 30 days after the pandemic emergency ends (WOWT). • Nebraska’s tax collections in October were up 17% than the original forecast. Net receipts sit at $305 million. This includes an increase of sales taxes about 14% above forecast and an increase in net individual income of 16% above forecast (Hastings Tribune). • The Nebraska Economic Forecasting Advisory Board estimated the State will collect an additional $285 million in fiscal year 2021. Originally, the Board predicted that Nebraska was set to collect about $4.7 billion in the current fiscal year (Tulsa World). • CMS approved Nebraska’s Medicaid expansion waiver, providing more benefits to newly eligible beneficiaries if they follow work and wellness requirements. Medicaid expansion enrollees will receive benefits including basic health services and prescription drugs. A third of new enrollees will qualify for these basic benefits only (Modern Healthcare). • Governor Ricketts announced that businesses, charities, and individuals suffering financially from the pandemic can apply for a second round of state aid starting October 21 and ending November 13. The grants total more than $300 million come from the CARES Act. About $146 million of the grant will go to bars and restaurants; small-business stabilization and livestock producers; cosmetic, massage, and body art businesses; events centers and sports arenas; ethanol plants; zoos; and movie theaters.

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o More than $48 million of the grant will go to nursing homes, charities, health clinics, food banks, childcare providers, and organizations that assist with eviction protection and housing security (Kearney Hub, Nebraska.gov). • Governor Ricketts signed budget adjustments, which includes flood relief, community health centers, and scholarships (Lincoln Journal Star).

o Adjustments include $140 million additional property tax relief (NASBO).

Nevada • State legislature unanimously passed spending bills that would allocate an additional $633 million of already-passed federal COVID-19 relief funds to state pandemic relief programs for the FY 2021. The spending bill includes $477 million for K-12 schools, $125 million for the State’s rental assistance program and the remaining $31 million for school reopening, technology, and addressing learning loss. The State Assembly also introduced legislation that would add another $50 million to the State’s grant program for small businesses adversely affected by the pandemic that would double the funding for the program (Las Vegas Sun, Las Vegas Review Journal). • State legislature is calling for federal aid to cover the $500 million shortfall in the budget proposed for the 2021 biennium. Otherwise, legislators would be forced to make cuts to health care, government services, and education to balance the budget. The government is also looking at non-pandemic related federal grants for the state, local governments, and nonprofit groups (KTNV Las Vegas). • State legislature budgeted an additional $6 million to treat prisoners for hepatitis C. The disease is highly prevalent in incarcerated populations but can effectively be cured, albeit an expected cost of $17,000 per patient. The proposed funding came after the State struck a settlement over the summer from a class-action federal lawsuit that was filed by inmates against the Nevada Department of Corrections for refusal to provide treatment. The Legislature had approved an initial $7 million towards to treatment in October. This additional $6 million expenditure, once approved, will provide treatment in the coming biennium (The Nevada Independent). • The state budget for Nevada System of Higher Education (NSHE) will decrease from $692 million in FY 2021 to $638 million in FY 2022 and $640 million in FY 2023, representing more than 7% reduction in the budget for higher education. The total NHSE budget for the biennium is $2 billion. NSHE’s professional schools include University of Nevada Reno and University of Nevada Las Vegas (UNLV) medical schools, Boyd Law School, and UNLV Dental School will all face 10- 11% cuts (Nevada Appeal). • The governor released a budget plan on January 18 that proposed $8.7 billion in general spending from FY 2022-2023. The new plan is a 2% reduction ($187 million) in spending compared to the previous budget. The overall budget is $27 billion for the next two years, which is an increase of $1.3 billion from prior biennial budget (Las Vegas Sun).

o The Nevada Department of Health and Human Services (DHHS) will have a $2.6 billion increase in funding from the current biennium to $15.2 billion. Most of that increase is for the State’s Medicaid services, which is increased to $10.24 billion.

o The plan restores a 6% Medicaid provider rate reduction and increased the neonatal ICU rate from $1,487 to $1,858.

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o As of November, 25% (or 761,000) of Nevadans are enrolled in Medicaid and an additional 778,000 people are projected to be enrolled in the program by the end of the next biennium. Nevada will specifically spend an additional $153.5 million and $146.9 million on Medicaid in FY 2022 and 2023 respectively to account for the increase in Medicaid caseload.

o The budget plan also proposes $3.7 million to reduce waitlists for the Autism Treatment Assistance and Home and Community Based Care Programs and $863,000 for the Assistance to Aged and Blind.

o The plan decreases funding for K-12 education and higher education by $130 million, although that is expected to be compensated by the $450 million federal aid the State will receive from the stimulus bill proposed by the Biden administration.

o State worker furloughs will end June 2021 and will not be continued in the next biennium. State workers will also receive expanded coverage via the Public Employees’ Retirement System.

o $226.5 million in general funds for one-shot expenditures have been proposed as well as setting aside supplemental expenses from FY 2021 (The Nevada Independent). • Nevada will face a general fund budget deficit of at least $535 million for the next two years. However, all of that is dependent upon if and when the federal government under the Biden administration and legislature will act to assist states with their fiscal problems. The State’s Economic Forum has projected $8.5 billion in general fund revenue, which is lower than the $9.67 billion requested by state agencies (Las Vegas Review-Journal). • On December 3, Nevada’s Economic Forum presented its official revenue forecast to lawmakers in preparation for the 2021 legislative session. Although Nevada held a special session over the summer to make budget reductions, the State is still facing a deficit (The Nevada Independent). • On November 6, Nevada state agencies were asked to submit 12% budget cuts for the 2021- 2023 biennium using levels approved during the 2019 session as the baseline. The request comes in an attempt to address the current budget situation. This summer, Nevada used its entire rainy day fund to help address its $1 billion+ budget shortfall (The Nevada Independent). • Members of Nevada’s Economic Forum, a state-mandated panel responsible for finalizing general revenue budget projections, met October 15 to discuss the impact of COVID-19 on the State’s budget. The forum heard from invited testimony and accepted public comments. Presenters reported that Nevada and Hawaii are tied for the steepest gross domestic product (GDP) declines in the country, and there are concerns that the State has recovered only about half of the jobs that have been lost since April (The Nevada Legislature, Las Vegas Review- Journal). • With the State confronting a $1.2 billion deficit and a requirement to balance its budget, the legislature took steps to slow the program’s spending — notably, curbing payments to doctors, hospitals and others who care for Medicaid patients to save $53 million through next summer. That 6% rate cut is the largest so far in the nation (The Washington Post).

o The 6% across-the-board rate reduction represents the biggest Medicaid provider rate cut, nationally, and is creating significant hardships for Nevada public hospitals.

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According to a recent Modern Healthcare article, the loss of federal match resulting from the rate reduction will cause more than $100 million in provider losses. • The signed budget restored funding to the Department of Health and Human Services which was facing a cut of $233 million. Among the funding restored was $49 million for the Medicaid program and $7.4 million for mental health services. Nonetheless, the DHHS budget was subject to the largest cut, a reduction of nearly $173 million (Nevada Governor).

New Hampshire • Governor Sununu proposed major tax cuts to focus on education and mental health programs. He proposed total spending of $6.83 billion in FY 2022 and $6.96 billion in FY 2023 in state funds. Total spending for the current fiscal year is $6.85 billion. He proposed cutting the meals and rooms tax from 9% to 8.5%, decreasing the business enterprise tax from 0.6% to 0.55%. Further, Sununu proposed phasing out the interest and dividends tax over five years (WMUR- TV). • New Hampshire’s budget deficit is forecasted to be less than $155.5 million by the end of this fiscal year in June. Legislative Budget Assistant Michael Kane expressed the State can choose to use its rainy day fund to cover the deficit. New Hampshire’s business profits tax and enterprise tax have been performing well, but hospitality and meals taxes remain low (The Center Square). • In January, New Hampshire mayors wrote a letter to the governor, education commissioner, and congressional delegation to request aid, as cities are facing major shortfalls as a result of the ongoing pandemic (Foster’s Daily Democrat). • Lawmakers approved a $45 million federal charter school grant that took nearly two years to pass. Additionally, Frank Edelblut, the Department of Education Commissioner, announced the State will receive $156 million in aid to help school districts in response to the ongoing pandemic (The Patch). • In November 2020, Governor Chris Sununu said the State was in a much better financial position than originally predicted at the beginning of the pandemic. He asked agencies to submit efficiency budgets (budgets that do not add services) that were less than spending authorized for FY 2021 (The Eagle Tribune). • Nashua schools in Hillsborough County are likely to lose $6 million in state aid in 2021 due to decreased enrollment, as well as the number of students qualifying for free lunches. Mayor Jim Donchess announced that the drop is expected to be from $38.2 million to $32.2 million. The federal government is offering free school lunches to all students, regardless of whether they qualify (New Hampshire Union Leader). • As of November 2020, the State netted $4.6 million to date from sports betting since launching in December 2019 (New Hampshire Public Radio). • A $33.8 million federal aid package to cover costs related to the coronavirus pandemic will partially go to schools in Northeastern New Hampshire. The Grand Forks public school district will receive $1.94 million. The funds may be used to cover items such as mental health support technology and building ventilation improvements (Grand Forks Herald). • The State filed a lawsuit and asked the Supreme Court to eliminate a regulation that requires residents employed by Massachusetts-based companies to pay income taxes while working

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remotely during the COVID-19 pandemic. Prior to the pandemic, about 123,000 New Hampshire residents used to commute to Massachusetts, and now roughly 80,000 still work for Massachusetts-based firm. These residents have since worked from home due to COVID-19. However, those residents are still paying the 5% Massachusetts income tax. New Hampshire Governor Chris Sununu argues that this is fighting the “unconstitutional attack on our sovereignty” (WCVB, WCAX). • State revenues for September were $20 million more than predicted. State has about $6 million more than budget writers expected to have a balanced budget and $53 million more than a year ago. Business taxes stand at $196 million, which is $35 million more than anticipated. The Department of Revenue Administration said the increase is mostly due to an increase in estimated payments and extension payments from multinational corporations and a decrease in refund requests. Some of the revenue was offset by rooms and meals tax returns. Tobacco taxes and liquor sales also stand strong (The Patch). • New Hampshire hospitals saw reduction of about $516 million in revenue and are still struggling. These hospitals have received about $300 million in federal and state grants to offset their losses, but some hospitals are losing millions a week, including St. Joseph Hospital (WMUR). • Between March and July 2020, New Hampshire hospitals lost about $575 million in revenue due to the pandemic. CARES Act provided hospitals $300 million. Some hospitals had to furlough staff members and implemented hiring freezes (Concord Monitor).

New Jersey • February 25 update: Governor Murphy signed bills to legalize and regulate marijuana for adults 21 and older (CNN). • Governor Murphy is expected to finalize and present his budget on February 23, and it is expected to see New Jersey public schools as a priority. School districts are drafting their budgets for 2021-2022 and there are no expectations of teacher layoffs and major cuts. Currently, Murphy’s proposal includes an additional $130 billion for K-12 schools, potentially tripling or even quadrupling the amount. Senate President Steve Sweeney will continue to ask the State to pay for special education costs (NJ Spotlight). • Four republican members of the Senate Budget & Appropriations Committee in New Jersey proposed to restructure Horizon Blue Cross Blue Shield of New Jersey to require a $600 million payment from the payer to be deposited into a new nonprofit dedicated to rate stabilization and improving the quality of health care in the State. This nonprofit called the “Health Care Rate Stabilization and Improvements Organization” focuses on addressing infant mortality, maternal mortality, diabetes, heart disease, and veterans’ health. The four members are concerned the premiums paid by Horizon policyholders will pay for spending unrelated to health care. Under the current legislation, S-3218, Horizon is required to make a one-time $600 million payment to the State, which would then go to nonprofit (Insider NJ). • Port Authority of New York and New Jersey announced a $1.3 billion reduction from the $8.6 billion 2020 budget, in addition to halted funding on any project that is not started construction.

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Additionally, the budget slashes 626 jobs through early retirements, attrition and voluntary buyouts, and reduces overtime by 15% and continues a hiring freeze (NJ.com). • Lawmakers are trying to protect a long-standing bistate tax agreement between southern New Jersey and Pennsylvania. The agreement allows commuters from each state pay income taxes where they live instead of where they work, and it has been praised as a key economic- development tool by South Jersey businesses. However, this agreement would not help New Jersey’s budget, although Governor Murphy has not indicated he will eradicate the deal. Either the New Jersey governor or the Pennsylvania governor can eliminate the agreement; however, members of the Senate Budget and Appropriations Committee unanimously voted that state lawmakers would get the power to at least block a governor from taking unilateral action on the reciprocal agreement (NJ Spotlight). • Governor Murphy signed into law increased funding for tax breaks that help New Jersey residents who have low-wage jobs. However, records show up to a quarter of residents who could receive the tax credit do not apply for the Earned Income Tax Credit (EITC). Earlier this year, the minimum age of eligibility for New Jersey’s EITC was lowered from 25 years old to 21 years old, making about 60,000 more people eligible (NJ Spotlight). • NJ Transit Board of Directors approved a $2.6 billion FY 2021 operating budget and a five-year capital plan which includes $11.21 billion in projects already funded. The budget does not include increasing fares (Mass Transit). • A proposed tax on online financial transactions received criticism from trade groups, exchanges, and online brokers. They said the tax will force major U.S. stock exchanges to relocate their data centers out of New Jersey. The securities industry pays about $1.4 billion in state and local taxes. The proposed 100th-of-a-cent tax would end after two years, during which the State could collect about $1 billion in revenue. “The amount of money that that one-one hundredth of a penny will mean to the taxpayers of New Jersey is about $500 million a year,” said Assemblyman John McKeon (D-Essex), a primary sponsor of the legislation. This tax was not part of the budget deal for this fiscal year (NJ.com, NJ Spotlight). • The approved budget includes doubling the funding of the State’s public defender system for the immigration courts. New York City has a program dedicated to providing detained immigrants’ counsel. New Jersey is adopting a similar program, and last year Governor Murphy allocated $3.1 million to hire lawyers. This year he has allocated more than $6 million (Documented NY). • Governor Murphy and Democratic legislators agreed on a state budget deal along the lines of the proposal initially submitted by the Governor. The budget, as proposed, would raise roughly $1 billion in taxes and borrow $4 billion to close a projected revenue shortfall. Lawmakers expect to take up the bills in budget committees Tuesday, Sept. 22 and hold a final vote in the full state Senate and Assembly on Thursday, Sept. 24. Governor Murphy has until Sept. 30, to either sign the budget or veto it in part of in full. NJ’s new fiscal year begins Oct. 1 and runs for nine months until June 30. A boost in an assessment on HMO plans to 5% would drum up more than $100 million (NJ.com).

o Tax increase on millionaires: State does not anticipate the increase to dramatically increase revenue. Those making over $1 million will be taxed 10.75% from 8.97% to provide annual rebates as high as $500 for families earning less than $150,000. The increase is estimated to net around $390 million (The Bond Buyer).

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• Governor Murphy signed legislation that authorizes borrowing $9.9 billion to fill budget hole. $2.7 billion for current fiscal year and $7.2 billion through June 2021 (CBS).

New Mexico • The New Mexico State Senate Tax, Business, and Transportation Committee unanimously approved a two-part legislation that will provide relief to businesses adversely affected by the pandemic. The first part of the bill will grant $200 million in immediate economic assistance through grants to small and midsize businesses. The second part will create incentives for large businesses to invest and relocate to New Mexico by providing partial sharing of gross receipts tax revenues during the construction phase of a project (Santa Fe New Mexican). • The State House Taxation and Revenue Committee approved a legislation in 7-2 vote that would increase surtax on health insurance premiums from 1% to 2.75%, generating an estimated $153 million per year. The revenue will be divided with 45% going to the State’s general fund and 55% into a new health insurance fund that will help low-income residents offset their premium costs of individual plans on New Mexico’s ACA marketplace. The bill (HB 122) proponents argue that it will widen access to coverage for self-employed workers and for those who don’t qualify for Medicaid but struggle to pay the premiums on their own (Santa Fe New Mexican). • New Mexico’s Environment Secretary requested the state Senate Finance Committee for a $3.7 million increase to the Department’s budget for FY 2022 to deal with understaffing issues on probing workplace safety, raising the overall department general fund to $16.8 million. The Legislative Finance Committee, however, intends to keep the budget the same as last year’s. The NM Environmental Agency had its budget cut by 42% by the previous governor’s administration and has only regained 22% of it and remains at lower funding level than it requires (Santa Fe New Mexican). • The Biden administration’s 60-day moratorium on oil and gas leases on federal lands will not financially impact the State's budget for FY 2022, according to the state Senate Finance Committee. However, the State expects to see a decline in revenue if the moratorium extends to a year or more in the budget for FY 2023 (Santa Fe New Mexican). • The New Mexico Senate Education Committee passed a bill that would increase the employer contribution rate to the New Mexico Educational Retirement Board by 1% per year for the next four years. The current employer contribution rate stands at 14.15% and will be raised to 18.15% in the fourth year (Santa Fe New Mexican). • President Biden has imposed a 60-day moratorium on all oil and gas-related leasing and permitting actions on federal lands, a decision that will have a significant impact on the state budget if the ban is extended beyond its initial term. However, the rule does not affect existing permits, and the Bureau of Land Management is not expected to have another competitive oil and gas lease sale until April (Albuquerque Journal). Vast areas of land in New Mexico are owned by the federal government, and the State collects 50% share of the royalties on production on those lands, which ranges from 12.5%-16.67% of the gross value of oil or gas (Forbes). • New Mexico lawmakers proposed a bill known as the Health Care Affordability Fund that would impose a 2.75% surtax on health insurers which would generate an estimated $110 million for the State. Proceeds from the tax would go into the state fund to increase enrollment on the

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health exchange. New Mexico, among many other states, is taking this action to make up for the loss in federal funding when Congress in 2019 repealed the federal tax on insurers, an action originally created under the ACA (Health Payer Specialist). • In early January, the governor and the Legislative Finance Committee (LFC) both released budget plans for FY 2021. The governor’s plan introduces a $7.3 billion spending budget, while LFC proposed a $7.36 billion plan; both are greater than last year’s state budget (by 3.3% and 4.2% respectively). The LFC plan calls for an average pay increase of 1.5% for state employees and teachers, $75 million for economic recovery, and $300 million to backfill the unemployment fund. On the other hand, the governor’s plan targets pay hikes and $475 million one-time funding for various pandemic relief programs (Albuquerque Journal). • Oil and gas development in New Mexico provided fiscal relief in fiscal year 2020, bringing in $2.8 billion revenue to the State’s budget. Leasing of federal lands for mineral extraction was the largest source of oil and gas revenue for the State, providing more than $800 million. However, sales of federal land are expected to change under the Biden presidency. A complete moratorium on federal leasing will create an expected $1 billion in revenue loss and elimination of more than 60,000 jobs in the first two years (Santa Fe New Mexican). • According to revenue figures released the first week of December by legislative and executive branch economists, New Mexico appeared poised to emerge from the coronavirus pandemic with an improving revenue outlook and deep cash reserves. While revenue levels took a big hit in the current budget year, they are expected to hit nearly $7.4 billion during the fiscal year that starts in July 2021. Modest spending has increased for public schools, broadband expansion, and public health programs may be targeted. Overall, revenue levels in the coming fiscal year are now expected to exceed the State’s current $7.2 billion budget by $169 million. However, employment levels in New Mexico are not expected to reach pre-pandemic levels until 2025, according to top state budget officials (Albuquerque Journal). • In November 2020, New Mexico Medicaid enrollment approached 900,000 individuals, prompting an all-time high in state spending, according to a new legislative program evaluation that was presented to the Legislative Finance Committee on November 18. While costs continue to rise, patient visits to providers are stagnating, and the State does not have the oversight procedures to determine if outcomes are improving for enrollees. Jacob Rowberry, one of the program evaluators, said spending has increased from $3.9 billion in 2014 to $5 billion in 2019 and is expected to rise to $5.8 billion in the current fiscal year with about $1 billion coming from the State’s general fund (Santa Fe New Mexican). • Governor Lujan Grisham directed executive agencies to reduce annual spending by 5% to help ease an anticipated budget deficit for the coming fiscal year. Agency budget proposal are due in an annual rite that provides time for legislators to craft a balanced budget before they reconvene in January 2021. A memo to state agencies obtained by the Associated Press calls for a 5% reduction in general fund levels for the fiscal year starting on July 1, 2021, compared with current-year spending, which is in line with recommendation from the Legislature’s budget and accountability office. The administration said it will consider additional funding to services such as Medicaid that may experience population increases and may support permanent programs that lack a permanent source of revenue. • New Mexico Legislature convened a special session in summer 2020 to revise the State’s budget in light of an estimated $2 billion budget gap resulting from a decline in state revenues.

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Governor Lujan Grisham authorized an amended state budget on June 30, restoring funding for certain priorities by vetoing more than $30 million in cuts.

New York • February 25 update: Governor Cuomo revealed the amendments to his marijuana legalization plan, which include allowing cannabis delivery services, specifying how social equity grant funding is distributed, and lowering the proposed penalty for selling marijuana to people under 21 (Marijuana Moment). • Governor Cuomo presented his “doomsday” budget proposal that aims to combat a $15 billion deficit. In his plan, Cuomo requested $15 billion in emergency pandemic relief but laid out an option that requests $6 billion in federal aid, plus a temporary wealth tax on top earners. If this “doomsday” plan is approved, the wealth tax would apply to those who make $5 million or more annually and the rate would vary by tax bracket. Rates would start from the current rate of 8.82% up to 10.82%. The 10.82% rate would apply to those who make $100,000 or more annually. This option also includes cutting school funding by $2 billion, Medicaid funding by $600 million, and other reductions by $900 million (The New York Times). • Casino revenues have fallen by about $600 million this current fiscal year as of early January. Casino revenues help fund education and the state treasury. Casinos are expected to generate about $180 million for the remainder of FY 2021 (New York Post). • Governor Cuomo stated he is open to sports betting to bring in additional state revenue, but he prefers a single-operator lottery model, unlike other states. He believes a single-operator model would generate ten times the revenue since all sports betting winnings would go to the State’s lottery. Shortly after Governor Cuomo’s announcement, New York Assembly member J. Gary Pretlow and Sen. Joseph Addabbo introduced identical multi-operator wagering bills (Action Network). • On January 11, Governor Cuomo mentioned in his State of the State address that he plans to release parts of his policy agenda over a four-day period. He stressed the need of health care reform and a rapid and efficient vaccine rollout. Additionally, Governor Cuomo proposed expanding telemedicine, creating a PHE training program, eliminating health insurance premiums for low-income workers, and legalizing recreational marijuana as a new revenue source (Bloomberg). • New York’s Metropolitan Transportation Authority (MTA) is expected to receive $4 billion in federal aid, which will help the MTA avoid laying off employees and cutting services (Bloomberg). • A report by the Albany Business Review found New York state and New York City face a combined budget of $73.3 billion over the next four years. Even with considerable additional federal aid, the State and City will still have to consider other options and implement significant actions to stabilize their finances. There are several proposals in the state Legislature that would bring in additional revenue by taxing the wealthiest New Yorkers; however, business leaders argue that more taxes on the wealthiest of New York would drive people and businesses out of New York for other states (Albany Business Review). • Port Authority of New York and New Jersey announced a $1.3 billion reduction from the $8.6 billion 2020 budget, in addition to halted funding on any project that is not started construction.

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Additionally, the new budget slashes 626 jobs through early retirements, attrition and voluntary buyouts, and reduces overtime by 15% and continues a hiring freeze (NJ.com). • New York Comptroller Thomas DiNapoli sees gambling as a potential revenue booster. In 2019 the State brought in about $4 million from lottery games, casinos, sports betting, and off-track betting. Nearly all of that revenue went to education funding. Because of the pandemic, DiNapoli stated that gambling revenue for 2020 will be reduced by about $700 million (WSHU). • Since April 1, tax receipts have been off by $2.8 billion, and the State has reduced its spending by $4 billion year-over-year to stabilize the budget balance. If the federal government does not offset the State’s losses, the State could face huge cuts to hospitals, schools, and police and fire departments. New York Comptroller Tom DiNapoli reported that state tax revenues for September were $8.8 billion, which exceeded projections by more than $922 million. However, sales tax revenue fell by $88 million from last year (amNY).

o State government and authorities are projecting $59 billion in revenue shortfalls through 2022. Governor Cuomo expressed that he will have to cut services and increase taxes if Congress does not pass an additional relief package. He plans to postpone decisions until after the November 3 General Election. New York’s state government has lost about $14 billion last fiscal year and $16 billion in the coming fiscal year. At the beginning of the pandemic, the State had the seventh smallest rainy day fund and had to borrow $4.5 billion, which the State held back 20% of scheduled payments to municipalities, school districts, and social services organizations (Wall Street Journal). • New York City Mayor Bill de Blasio furloughed himself and other staff members for a week. There are 495 employees in total. Staff must take week-long furlough between October to March 2021 (The New York Times).

North Carolina • From January to September 2020, North Carolina’s tax revenues were 0.1% above from last year (The Center Square). • North Carolina began its $6 billion transition to Medicaid managed care in January. It is expected for standard plans to go live on July 1, 2021. Open enrollment will begin February 15 and end May 14. Last year, North Carolina had to delay its transition to managed care when Aetna Better Health of North Carolina, Optima Family Care of North Carolina and My Health by Health Providers challenged the contract awards (Health Payer Specialist). • Tax revenue for FY 2020 exceeded the State’s estimate by $513 million or 2.2%; for the current fiscal year, General Fund revenue is up by $426 million or 4.4% compared to last year. Taxes from online sales has helped boost North Carolina’s tax revenue (News Observer). • A report from HHS Office of Inspector General (OIG) found that between December 2018 and May 2019, multiple nursing homes in North Carolina had problems related to their life safety and emergency preparedness. Some of the issues found include smoking policies, fire drills, and emergency plan training and testing. OIG has indicated that these issues emerged from inadequate nursing home oversight and high staff turnover. The State will be following up with the facilities in violation to ensure corrective actions are underway (Inside Health Policy). • Governor Roy Cooper proposed a $25 billion budget, with plans to expand Medicaid, increase unemployment benefits, give teachers higher bonuses, and cut funding to Opportunity

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Scholarships. Plan does not require new taxes and would remove $5 billion in new debt (Carolina Coast Online). • General Assembly passed the COVID-19 relief package in September and does not intend to make cuts to education (EducationNC). • The State collected $457 million in tax revenue in FY 2020. Overcollections occurred due to more people paying their income taxes in FY 2020 than expected after the three-month deadline extension (The Center Square).

North Dakota • February 25 update: North Dakota lawmakers approved a $680 million bonding proposal to fund infrastructure projects. If the bonding bill becomes law, it would fulfill the state's pledged $750 million share of the Fargo flood-prevention project’s cost and increase its total contribution to $870 million (Grand Forks Herald). • State employees and elected officials are expected to receive raises, but House and Senate budget writers disagree on the salary proposal. The House Appropriations Committee wants an annual 1.5% increase of the State's next two-year budget cycle, and the total cost would be nearly $71 million. Raises would include a minimum of $100 and a maximum of $250 a month for both years. However, the Senate Appropriations Committee prefers a 2% raise in each of the next two years, which totals $72.8 million. Raises would include an $80 minimum and a $300 maximum per month in the first year, with a 2% raise across the board the second year. Top budget writers predict that the state revenue forecast in March will help the writers make a decision (Bismarck Tribune). • Governor Burgum's budget plan for the next two-year budget cycle proposes $17 million for the substance abuse disorder voucher program, which ran out of funding last year. This voucher cover gaps in people's abilities to access services close to them. More than 4,200 people have used the voucher program, and 21 private providers offer services through this program (Bismarck Tribune). • Part of the State’s $260 million budget plan includes over $95 million for continuing the pandemic response. Major COVID-19 items are budgeted for the entire 2021-23 budget cycle, which include testing costs, contact tracing, vaccines, lab workforce and related costs, funding for local public health units, and personal protective equipment. The State plans on using $54.5 million from general funds to help fund these items (Bismarck Tribune). • Lawmakers approved a $3.95 general fund budget plan that includes several large fiscal categories typically filled by the oil industry that are currently vacant for this biennium and the next. Oil production has slowly climbed the end of 2020, but Lynn Helms, North Dakota’s top oil regulator, predicted a long road to recovery (Grand Forks Herald). • Republican legislators in North Dakota, a large oil-producing state, proposed a $1.1 billion bonding package to support infrastructure projects. The revenue from oil and gas will pay off part of the bond over the next 20 years (Finance & Commerce). • The North Dakota Legislative Budget Section reallocated some of the CARES Act funding to the Medical Expense Assistance Program (MEAP), which help first responders and other frontline health care workers deal with expenses as a result of the COVID-19 pandemic. The application

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process opens December 9, 2020 (KX News). Additionally, the North Dakota Department of Human Services’ Behavioral Health Division rolled out a new program that uses CARES Act dollars to help residents get access to mental health care services to address needs including anxiety, addiction, and depression while they remain in their own homes and community (KFYR- TV). • Sales tax revenues for October were 25% below projections. To date the State has yet to make budget cuts. However, because of the ongoing COIVD-19 pandemic, lawmakers might have to propose agency cuts. North Dakota also experienced a 30% decrease in oil tax revenues (KYFR- TV). • North Dakota Legislative budget section reallocated more than $221 million in unused coronavirus aid money, and about $21,000 of that will go towards Indian Affairs. The remaining funds will be split up and go to Public Health Safety, Continuation of Government Services, and delivery of PPE to tribal areas (KFYR-TV). • State officials approved to repurpose $221 million from the CARES Act to various state agencies, including oil companies to support fracking. Oil companies will receive $16 million. $33 million of the federal aid will go to the education department, $29 million to the Department of Commerce’s economic resiliency grants, and $61 million to cities and counties to help with law enforcement costs (CBS Minnesota). • North Dakota will save money by shrinking its office footprint. State agencies are considering giving up their leases since more than 80% of state employees are working remotely. Some employees are “hoteling” or sharing office space on a reserved schedule. If the state agencies decide to reduce their office footprints, the State could potentially save more than $1 million (Bismarck Tribune). • Despite tax collections taking a hit in August, North Dakota’s overall state revenues for two-year budget cycle remained strong with no expected budget cuts. Additionally, Office of Management and Budget Director Joe Morrissette presented a report on August general fund revenues to Legislature’s Budget Section. Despite declines in sales taxes, overall tax collections were 2.4% above forecast for 2019-2021 (Bismarck Tribune). • North Dakota announced its Economic Resiliency Grants program, which helps eligible businesses and non-profits recover the cost of improvements (made after March 27) and upgrades that help prevent spreading COVID-19. Businesses with a single location in North Dakota are eligible for up to $50,000, while those with multiple locations can receive up to $100,000 (Grand Folks Herald).

o Grant will be given on a first-come, first-served basis and come from a pool of $66.4 million (from the CARES Act). The grant can be used to reimburse a business for improvements.

Ohio • February 25 update: The Ohio House passed legislation to provide $210 million in grants to fund broadband access for underserved areas in the state. About 1 million Ohio residents currently have no high-speed internet options (Cleveland.com).

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• Governor DeWine proposed a nearly $2 billion budget plan that is focused on helping businesses recover from the pandemic. Savings from prior budget cuts will help fund most of the plan. Direct federal COVID-19 relief dollars will fund the rest of the budget plan. The biennial budget does not include tax increases. However, the proposal includes a $10 increase in car registration fees and a $2 increase to the title fee to help fund the State Highway Patrol. Governor DeWine has no plans to use any dollars from the rainy day fund. He called his proposal conservative and cautious (The Columbus Dispatch). • Governor DeWine signed an executive order on January 22 that restores $160 million to schools and $100 million to the bottom line of higher education. The order also preserved $390 million in previous budget cuts made by state agencies for the current fiscal year (The Columbus Dispatch). • The Ohio Department of Medicaid (ODM) awarded its fiscal intermediary service contract to Gainwell Technologies, a technology solutions provider. Gainwell has more than 50 years of experience supporting state Medicaid agencies in the U.S. The fiscal intermediary is part of the State’s efforts to modernize ODM’s management information systems. Gainwell will implement the fiscal intermediary component of ODM’s technology modernization strategy (Ohio Department of Medicaid). • A report from Allan Baumgarten, a Minnesota-based independent healthcare analyst, shows that Ohio’s hospitals were in a good financial position before COVID-19. Hospital profitability increased last year specifically in the Cleveland/Akron, Columbus and Cincinnati/Dayton areas. When the pandemic started and Ohio hospitals had to cancel or postpone elective surgeries, hospitals suffered a combined hit of $2.38 billion. The Ohio Hospital Association estimates that Ohio hospitals has lost $4.28 billion to date (Modern Healthcare). • Ohio’s budget will have a $2 billion hole for the FY 2021 due to the ongoing COVID-19 pandemic, according to House Majority Floor Leader Bill Seitz, a Cincinnati Republican. In October, he stated he does not believe lawmakers will include a tax increase in their budget to cover the financial shortfall for FY 2021. He recommended using the State’s $2.7 billion rainy day fund (Cleveland.com). • In November, Medicaid caseloads increased by 9% due to COVID-19, but declining state revenues and a projected budget deficit put the $23 billion health-care program at risk. Medicaid Director Maureen Corcoran said that the State is facing a several billion dollar shortfall this current fiscal year. To date, Ohio hospitals have lost at least $4 billion due to the cancellation of elective procedures (The Columbus Dispatch).

Oklahoma • February 25 update: The Oklahoma House unanimously passed a bill that would allow teacher candidates who have a doctorate, a master’s, or a bachelor’s degree to teach for two years as they complete required coursework and participate in a mentor program provided by the school district prior to taking state certification exams. The goal is to lower the need for emergency certified teachers in public elementary schools (KSWO). • Medical marijuana sales totaled $831 million in 2020, and retailers brought in $71.6 million in state and local taxes (Marijuana Business Daily).

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• Oklahoma lawmakers opposed legislation that included provisions they wrote and favored in fear of Democrats pushing a partisan agenda in the future. Lawmakers expressed concern that Democrats would make the bill a vehicle for more spending and policy measures. The legislation included proposals from Sen. Jim Inhofe and Sen. James Lankford (Tulsa World). • Governor Stitt unveiled a $8.3 billion budget for FY 2022 that focuses on funding agencies, supplemental appropriations, savings, pension reapportionment and one-time expenditures. Governor Stitt proposed putting $300 million into the State’s Revenue Stabilization Fund. In his plan, he proposed to pay for the $164 million Medicaid expansion by increasing the Supplemental Hospital Offset Payment Program to 4% from 2.5%. Additionally, state officials plan to use savings from moving Insure Oklahoma (a health care plan for low-income Oklahomans) members into expanded Medicaid to pay for the expansion. The Board of Equalization will determine how much lawmakers will have to spend in crafting and finalizing the budget on February 16 (Tulsa World). • Oklahoma announced its four Medicaid managed care insurers for its $2.1 billion Medicaid expansion program: Humana Healthy Horizons, Blue Cross Blue Shield of Oklahoma, UnitedHealthcare, and Oklahoma Complete Health. Oklahoma has not executed a managed care program since the early 2000s (Health Payer Specialist). • Oklahoma State Superintendent Joy Hofmeister presented a $3 billion budget request for public schools to the state Senate in January. The budget plan was created to achieve specific goals by 2025, which include becoming a top 10 state for graduation rates and reducing the need for emergency certified teachers. This budget would raise funding for schools by $191 million. Of that $191 million, $110 million would make up for 2020’s cuts. Schools will still receive $650 million in federal aid as part of the COVID-19 stimulus package. The state legislature is expected to vote on the budget this upcoming session (KOCO News). • Revenue for calendar year 2020 fell by 3.8%. In total, Oklahoma collected about $13.2 billion in taxes and fees, which is almost $521 million less than the previous calendar year. Taxes from oil and gas production declined the most – collections were down $396 million (Enid News & Eagle). • Gross tax receipts for November were $970.5 million, which is about 2% down from this time last year. Tax revenue is the largest source of revenue for the state, which continues to decline. Oil and gas tax revenues continue to decline, and Treasurer Randy McDaniel commented that the oil and gas sector has lost about 20,000 jobs in the past two years (The Oklahoman). • Oklahoma legislators received a pay raise for the first time in more than 20 years in November 2020. Their salaries will jump to $47,500 from $35,021, which is a 35% increase. The pay raises are funded through the $7.7 billion state budget (Lawton Constitution). • Tax receipts dropped in October, largely due to the oil economy. Gross production taxes on oil and gas were down by about 33% and amounted to $48 million. Personal income tax receipts were also down 7.5% or $28 million from last year. Gross receipts were $1.1 billion in October, which is $47 million or 4.1% less than last October (Tulsa World). • Earlier in 2020, Oklahoma was approved for Medicaid expansion. Voters did not approve State Question 814 to redirect a portion of Tobacco Settlement Endowment Trust (TSET) funds to help pay for the State’s 10% share of the expansion. About 60% of voters opposed the ballot measure. Currently TSET uses the interest earnings off its $1.3 billion trust to fund tobacco

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prevention programs, cancer research, and other initiatives to improve Oklahoma residents’ health (The Oklahoman). • The FY 2022 $3.2 billion education budget request was approved. This budget includes $1 million in supplemental funding to rewrite WAVE, the outdated main student information system. Also, the Department of Education renewed $18 million initiative to hire 350 school counselors (Oklahoma Watch). • Oklahoma ended FY 2020 with a $586 million budget shortfall (KSWO).

Oregon • February 25 update: Oregon voters passed Measure 110 in the Fall 2020 that will dramatically expand addition treatment by taking drug users out of jails and place them into clinics. Oregon has one of the highest rates of substance abuse in the country, estimating more than 332,000 Oregon residents living with a substance use disorder based on surveys on drug and alcohol consumption. The 2020-2025 Oregon Statewide Strategic Plan outlines the annual state cost of substance misuse is around $6.3 billion, which is nearly 16% of the entire state budget (KGW, Oregon.Gov). • On January 21, Governor Brown delivered her State of the State address and expanded on her 2021-23 biennium budget to create a more “just and equitable Oregon.” Brown highlighted key policy and budget initiatives focused on Oregonians including:

o Proposed investments to expand affordable health care. o Broadband expansion statewide. o Support to help communities create response plans and fire evacuation routes so that they are better equipped for future fire seasons.

o More than $10 billion for K-12 schools and early education so that Oregon can close the opportunity gap and build an antiracist curriculum that is honest about the past.

o $250 million in affordable housing, homelessness prevention and rental assistance. o Prioritizing criminal justice reform (Oregon.Gov). • Governor Kate Brown released the proposed 2021-23 budget. This budget calls for “strong cost controls” for the State’s health care system and prioritizes behavioral health and health equity. Proposed cost containment methods include reducing hospital reimbursement rates, reduce inflation into CCO rates, and elimination of the State’s Graduate Medical Education Program. Of the $25.6 billion general fund spending in the proposed budget, $7.7 billion for human services agencies. Notably, of the $7.7 billion, $10 million is slated for undocumented and uninsured, $27.7 million for incentives to diversify the State’s medical/behavioral health workforce, and $30 million to modernize the public health system. • With regards to the COVID-19 pandemic, an extension of Governor Brown’s declaration of a state emergency has been made for 60 days (March 3, 2021) (Oregon.Gov). • On December 1, Governor Brown proposed cutting Medicaid rates to hospitals from 80% of Medicare to 76%. She also outlined reduced funding increases to coordinated care organizations (CCOs) (3.4% to 2.9% for the 2021-23 budget). The proposed 2021-23 budget allocates $27.2 billion to Medicaid (The Lund Report).

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• On November 17, Governor Brown announced the State would be providing $55 million in financial assistance to support Oregon businesses. These funds will be distributed to counties who will allocate funds to businesses (Oregon.Gov). • The State’s December 2020 Economic and Revenue Forecast stipulates that economic expansion will endure under the assumption that a vaccine and other medical interventions to address the COVID-19 PHE will become widely available to Oregonians in 2021. Oregon’s economy is projected to return “to health” by mid-2023. Of note, Oregon’s budget process for the 2021-23 biennium will begin January 2021 with the release of the Governor’s Recommended Budget (Oregon.Gov). • Oregon is one of five states (additionally, Idaho, Iowa, Missouri, and Vermont) that have apportioned Coronavirus Relief Funding (CRF) dollars towards broadband grants to address connectivity needs including telehealth (The Pews Charitable Trusts). • On August 10, Oregon lawmakers concluded the second special session of the summer to address the $1.2 billion budget deficit. Lawmakers cut around $400 million across state agencies and utilized ~$400 million in the emergency Education Stability Fund (KGW). • Oregon’s 2019-2021 biennial Budget Highlights include:

o The legislatively adopted budget (LAB) for 2019-2021 biennium Is $85.8 billion total funds, an increase $7.8 billion (or 9.9%) from the 2017-19 legislatively approved budget of $78.0 billion.

o This increase is due to the authorization to spend $25 more in General Fund and $4.1 billion more in Other Funds in 2019-21 than in 2018-19 (Budget Highlights, Sept 2020).

Pennsylvania • Governor Wolf delivered his 2021 Budget Address and announced his proposal for FY 2021- 2022. He focused on barriers such as an unfair tax system and an education system that is unequal and underfunded. Currently, only 11% of state funds flow to education. The governor proposed that 100% of existing state dollars flow through the funding formula to schools while cutting taxes for working residents. Additionally, he hopes to stabilize childcare across the state and ensure equal access for families that need childcare services. Some other highlights of the budget proposal include allocating $145 million to businesses, increasing funding for a modernized workforce development system, investing in public infrastructure, increasing minimum wage to $12 an hour and eventually increasing to $15 an hour, allocating funding for criminal justice reform, building on bipartisan health reform, and legalizing recreational marijuana (PA.gov). • Governor Wolf has chosen Alison Beam to succeed Dr. Rachel Levine as the PA Health Secretary. While Beam is not a medical professional, she has played a key role in working with the state administration and lawmakers to direct $295 million in federal aid to long-term care facilities suffering throughout the pandemic. Her top priority will be overseeing the distribution of the State’s COVID-19 vaccines (Pittsburgh Post-Gazette). • Spotlight PA found Pennsylvania tenants and homeowners missed out on roughly $108 million of $175 million in federal coronavirus relief funding due to state programs making it difficult to access the funds. The deadline to pay out the $175 million was November 30, which the State

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missed. The remaining funds will be redistributed to the State’s Department of Corrections (Spotlight PA). • With the COVID-19 pandemic continuing to be of such magnitude and severity in the Commonwealth, the Governor has renewed his emergency disaster declaration for an addition ninety days citing the action as necessary to protect the health, safety and welfare of the citizens in Pennsylvania (Pennsylvania Bulletin). • Pennsylvania lawmakers are close to finalizing the state budget. The near $12 billion appropriations bill is expected to pass November 27. This proposal does not include any new taxes. Additionally, it calls for flat funding for most major state programs, with some reductions for government operations. The budget also calls for no new borrowing (PennLive). • On October 2, Governor Tom Wolf issued an Executive Order establishing the Interagency Health Reform Council (Council), which will be tasked to evaluate the potential alignment of the Commonwealth’s health care payment and delivery systems to provide efficient, whole-person health care that also contains costs, reduces disparities and achieves better health outcomes for residents of the Commonwealth. The Council is required to submit a report to the Governor no later than December 31, 2020 that includes proposals for the development and implementation of health care reform and identifies all policy and legislative changes needed to effectuate the Council’s proposals. • On October 16, Governor Wolf signed HB 2487, which temporarily freezes scheduled cost-of- living salary adjustments for certain public officials, including the governor, lieutenant governor, state treasurer, auditor general, attorney general, commissioners of the Pennsylvania Public Utility Commission, heads of departments, judges and members of the General Assembly due to the pandemic (PA.gov). • Governor Wolf proposed legalizing marijuana for recreational use by Pennsylvania adults, arguing that legislative leaders should take a serious look at the issue this fall given the serious hit the COVID-19 pandemic has taken on state revenues and the need to complete the State’s 2020-21 budget. GOP lawmakers indicate that they will not support the measure (PennLive). • Pennsylvania contacted the U.S. Department of Labor about a loan to prop up its unemployment compensation trust fund as President Trump pushes states to help pay for an extension of federal unemployment benefits. Governor Wolf's office said it was waiting for federal guidance to understand the full impact of Trump's executive order (Associated Press).

Puerto Rico • Governor Pedro Pierluisi declared a state of emergency on January 24 over violence against women. His declaration calls for a several policies to combat femicides and other forms of gender violence (Miami Herald). • Part of the $900 billion stimulus Congress approved in December includes $614 million for nutrition assistance for Puerto Rico and other territories. • The Puerto Rico Restaurants Association asked the government to consider and approve the proposal presented in early October to create a new assistance or incentives program for the industry using the remaining CARES Act dollars. The Fiscal Agency and Financial Advisory

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Authority is currently reviewing this request and are expected to quickly respond since the CARES Act funding will run out by the end of December. • The Puerto Rico Fiscal Agency and Financial Advisory Authority announced an RFP for broadband infrastructure grant administrator services. The goal is to expand broadband access to underserved areas in Puerto Rico. The administrator will create and implement a grant program for broadband service providers pursuant to a broadband infrastructure fund administration agreement. Currently the Certified Fiscal Plan allocates $400 million to support this expansion for FY 2020-2021 (The Weekly Journal). • Trump announced the U.S. will send Puerto Rico $13 billion in disaster aid (NBC News).

Rhode Island • As of February, Rhode Island’s budget remains in good shape for the current fiscal year and is on track to finish with a $44 million surplus by June 30. The predicted deficit as a result of the pandemic was not correct due to a resilient economy and aid from the federal government. Incoming Governor Dan McKee is required to submit a plan to address his budget plans by March 2021. The plan is expected to include the current problems with federal Medicaid billing at the state psychiatric facility. These billing issues have not been resolved and have caused confusion as to how much the State can save money moving forward (WPRI). • Rhode Island received more than $70 million in federal funding to bolster coronavirus testing and vaccination programs. The money, from the CDC, will be allocated to support testing capabilities, contact tracing, containment, mitigation efforts, and ultimately vaccine distribution (The Day). • The Office of Management and Budget (OMB) announced Rhode Island has budgeted over $1.8 billion to cover COVID-19 related costs including tests, supplies, and assistance to hospitals. Budget officials further broke down the State’s pandemic spending into 20 different categories, with the largest spending directed towards state payroll costs for public health and public safety workers eligible through the CARES act, followed by spending towards schools and hospitals (WPRI). • Governor Gina Raimondo has been nominated as U.S. Commerce Secretary. The State anticipates Lt. Gov. Daniel McKee to rise to the Governor position, a possibility that has constituents and specifically small-business owners excited. McKee is known as a champion of small-businesses, which is needed now more than ever as the pandemic continues to weaken and close small-businesses everywhere (Providence Business News). • Governor Raimondo signed off on the proposed budget (Washington Times). • Rhode Island lawmakers approved a $12.8 billion state budget plan for the current fiscal year that started five months ago, using federal coronavirus aid to offset a projected $275 million deficit. The budget for FY 2021 approved 11-2 by the House Finance Committee restores funding to cities and towns without raising taxes or fees. The budget plan also does not include any layoffs of state workers (Associated Press). • Previously the State estimated a $800 million budget deficit but has since estimated a $708.4 million deficit for FY 2021 (What’s Up Newp). Governor Raimondo recently announced the State

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needs additional stimulus funds. Without additional funds, there will be mass lay-offs of state employees and cuts to education funding (The Patch). • On August 8, former President Trump made up to $44 billion available from The Federal Emergency Management Agency (FEMA’s) Disaster Relief Fund. The FEMA money became available for states to use for unemployment benefits after President Trump issued an executive order boosting the benefits for workers who were displaced by COVID-19, the respiratory ailment caused by the coronavirus. The federal government announced shortly after Rhode Island’s application was submitted that it approved Rhode Island’s application for a grant to pay an extra $300 a week for unemployment benefits (Providence Journal).

South Carolina • As of January 2021, South Carolina has a budget surplus of more than $1 billion. The State’s General Assembly will reconvene the second week of January to decide what to use the surplus on. Earlier in January, Governor McMaster unveiled his proposed budget, which included more money in the reserve funds, a small business grant program, need-based student aid, workforce training, additional education funding, broadband expansion, school resource officers, mental health counselors, increased first responder funding, and no income tax on retirement for first responders and military veterans (SCNow). • 686 nonprofits in South Carolina will receive grants totaling $25 million to help offset losses during COVID-19. Grants range from $2,500 to $50,000 (The Sumter Item). • The pandemic is expected to further reduce state tax collections by $50 million, leaving South Carolina legislators with a surplus of $811 million to spend in FY 2021. Whether the Legislature creates a budget for the second half of the fiscal year remains to be seen. It is possible that leaders may opt not to write a budget at all for 2020-21. Of the remaining surplus, $775 million of it is cash meant for one-time expenses such as maintenance and equipment. That leaves $36 million from economic growth over last year to be spent on recurring expenses such as salaries. Spending that $36 million could potentially put agencies in a hole if growth continues to shrink, according to House Ways and Means Chairman Murrell Smith, R-Sumter (The Post and Courier). • Several cities in South Carolina cut back funding for police departments because of the revenue shortfalls due to the pandemic. Cities reduced their police spending anywhere from $1 million to $3 million (The Post and Courier). • The Board of Economic Advisors in South Carolina met the first week of September 2020 to predict revenue estimates for FY 20-21. Governor McMaster suggested state agencies prepare plans to cut budgets up to 3% (US News).

South Dakota • Governor Noem announced in her special address to the Legislature that revenue projections are exceeding expectations by as much as $125 million. She stated that about $51 million comes from higher-than-anticipated tax revenues. Since Congress extended the deadline for states to use CARES Act dollars, the state now has about $375 million in one-time funds (Argus Leader). • Governor Noem proposed a $50 million plan for a proposed $200 million college scholarship fund for low-income prospective and current students. T. Denny Sanford and First PREMIER

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Bank are contributing $50 million, which the governor wants the Legislature to match. No one has yet to oppose this bill (Keloland). • South Dakota was the only state to see lower unemployment from December 2019 to December 2020. The State saw a decrease of 0.4% from 2019 (Washington Examiner). • Voters approved to legalize medicinal marijuana in November 2020. Governor Noem says millions of dollars are needed to prepare for the medicinal and recreational usage before the State can collect taxes. She stated Legislature will need to provide more than $4 million to start (Keloland). • In her 2021 budget address on December 8, Governor Kristi Noem plans to invest substantially into South Dakota’s infrastructure, including technical education. She proposed a $200 million investment to expand broadband access across South Dakota over the next several years. Half of the investment will come from the State’s General Fund. Other infrastructure proposals include a grant program to improve the ability process and store meat products, a new state fair livestock complex, as well as upgrading the State’s air fleet, investing in equipment for high- demand programs, and maintaining state-owned dams. Governor Noem’s plan also includes a one-time $11 million investment to schools facing shortfalls due to COVID-19. Because the State had better-than-projected tax revenue, it will head into next year with a surplus (KOTA-TV). • South Dakota legislators will receive a pay raise of $958.41 in 2021, which means the Legislature’s budget will be short $61,114 unless lawmakers increase it. The decision was made based on a state law that says a lawmaker’s salary shall be one-fifth of the South Dakota median household income (Keloland). • The State brought in millions more than state officials had anticipated during the pandemic. In October, the State’s revenue was $21 million more than expected. Mark Quasney, a state economist for the Governor’s Bureau of Finance and Management, said that construction of wind-electricity facilities is the main reason why the revenues have exceeded expectations. There are six wind farms under construction, which the total investment is estimated to be $2 billion. Quasney stated that this activity accounts for about half of the State’s additional sales and use tax collections (Keloland). • Lawmakers increased state government’s budget for the current year to reflect $1.396 billion of additional federal aid for the pandemic. During the special session that Governor Noem called in September, legislators adopted a resolution that included recommendations for how they want Governor Noem to spend the rest of the COVID-19 funding (Keloland). Governor Noem announced her plans to spend the funding, which includes $400 million on business grants and $100 million on community health care providers. Appropriators drafted the remaining $97 million, which includes the following (Kota TV):

o $15 million for acute care in hospitals. o $10 million for housing assistance. o $5 million for destination marketing organizations advertising. o $2 million for adult education and private nonaccredited education.

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Tennessee • Governor Lee delivered his third State of the State address on February 8 and revealed budget and legislative priorities. The $41.8 billion proposed budget highlights for FY 2022 include $200 million for broadband expansion, $120 million for teacher salary increases, $150 million for COVID-19 relief and support, $200 million for local infrastructure grants, $931 million for capital maintenance and improvements, and $71 million for education (TN.gov). • Governor Lee presented his budget on February 8. In Fall 2020, Governor Lee requested state agencies to cut their budgets by 12%; as of January, state revenues are higher than anticipated (WTVF). • Educators predict the literacy rate in Tennessee will fall as a result of the ongoing pandemic. Therefore, he Tennessee Department of Education plans to spend $100 million on a new literacy initiative called Reading 360, which will provide optional training and materials to teachers. Districts will be able to collaborate on how best to teach children to read. The program’s goal is to increase the number of third graders who meet or exceed expectations on the State's standardized assessment in reading by 25% by 2025 (The Tennessean). • Tennessee’s tax revenue exceeded the State’s forecast by a little more than $129 million in November. This marks the fourth month of positive revenue since the pandemic started. Overall state revenue for Tennessee in November was about $1.1 billion (Washington Examiner). • As of December, Tennessee spent only a little more than 43% of its CARES Act dollars. In total, Tennessee entities received more than $596 million of the $31 billion Education Stabilization Funds (ESF) allocated by Congress for schools and colleges (Dickson Post). • The budget passed by Governor Lee projects a shortfall of $1.5 billion for the remainder of FY 2020 and into FY 2021. The Tennessee Senate approved a $39.4 billion budget that is a $500 million reduction to its proposed budget in March. The spending plan, according to Senate Majority Leader Jack Johnson, assumes a $500 million hole in this year’s budget and a $1 billion hole in next year’s budget. They mainly cut this amount out of the budget by ending all the of improvement items in the Gov’s previous budget. Of note, $21 million in proposals to expand TennCare services were forgone. Authority was given to the Finance Department to check every reserve and conduct employee buyouts if possible. Also, each department was asked to present plans for a 12% in reductions. This does not mean that every department will have to take the 12% reduction but will need to put the option on the table. The Legislature will review when session is back in January (Times Free Press).

Texas • Texas launched a statewide rental relief and assistance program the beginning of February that will distribute more than $1 billion to qualifying renters and landlords adversely affected by the COVID-19 pandemic. The Texas Rent Relief Program delivered via Department of Housing and Community Affairs will help cover rent and utilities for renters making less than 80% of the area’s median household income (The Center Square). • The House and Senate each released a two-year budget proposal that is about $7 billion over the $112.5 billion general revenue available for the next two fiscal years. State legislators are required to pass a balanced budget so there will be budget cuts, delayed spending on certain

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items, and/or withdrawal from the State’s rainy-day fund of $10 billion to pay for the extra money proposed in the budget. In addition to approving the budget for the next biennium, state lawmakers also must approve a bill that covers the $4.6 billion shortfall in the current budget (The Texas Tribune). • State legislature is to plan and distribute $112.5 billion in general-purpose funding for the State’s next biennial budget. This is lower than the current budget of $112.96 billion which is presently experiencing a projected shortfall of $1 billion, far lower than the $4.6 billion expected over last summer (The Texas Tribune). • On January 4, the Texas Health and Human Services Commission (HHSC) posted notifications of upcoming Medicaid managed care procurements.

o August 2021: The state is scheduled to post a Request for Proposal (RFP) for STAR Health, the managed care program for children in foster care. A single statewide MCO currently delivers STAR Health services.

o Second quarter of SFY 2022: The state is scheduled to post an RFP for STAR+Plus, the managed care program and adults with disabilities and individuals 65 and older.

o First Quarter of SFY 2023: The state is scheduled to post an RFP for STAR and CHIP, the managed care program serving primarily children and pregnant women.

o Third Quarter 2023: The state is scheduled to post an RFP for STAR Kids, the managed care program for children with disabilities. • HHSC posted the 13th edition of the biennial Texas Medicaid and CHIP Reference Guide or “Pink Book.” The Pink Book includes the most up to date data regarding the State’s Medicaid program, including caseload and cost information and important background regarding the program. All data is for FY 2019 unless otherwise indicated. • The second half of FY 2020 observed a 4.8% reduction in sales tax revenue and more than 40% reduction in other revenue streams. The State is expected to end with a $4.6 billion budget deficit over the next two years. State agencies will face 5% reductions with HHSC proposing to cut over 700 full-time employees for “eligibility operations” for services like Medicaid, SNAP, and CHIP (The Texas Tribune). • On November 9, a group of well-respected economists in Texas submitted an open letter encouraging state officials to consider expanding Medicaid. Based on their analysis, the economists have determined that implementing a Medicaid expansion would have a net positive impact to the State. The letter can be found here. • HHSC presented its funding request to the Legislative Budget Board (LBB) for the upcoming biennium. HHSC requested $31.9 billion in general revenue and $84.4 billion in all funds for base services. The Commission also made requests for exceptional items (EI) totaling $1.9 billion in general revenue and $4.9 billion in all funds. The budget request was based on three key principles: maintaining essential client services, funding necessary services to prevent break down of operations, and scaling its request to achieve the minimum necessary for effectiveness. The proposed budget request does not contain reductions in client services. EI dollars target maintaining access for essential client services, ensuring compliance with state and federal regulations, intellectual and developmental disabilities system redesign, and investment in IT and MMIS system improvements (Texas House of Representatives).

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• Rather than holding legislative hearings to get feedback from the public regarding interim charges, Texas legislative committees posted requests for information regarding multiple topics including: the Texas HHSC procurement process; cost containment; the value of the current Medicaid managed care system; and Medicaid-related healthcare costs, among other items. The legislative committees are currently sifting through responses to the RFIs. In the meantime, no information has been shared publicly regarding how the Legislature will operate once session begins in January. The two chambers are working to coordinate efforts, but much remain unknown, especially in light of the upcoming election. There is a possibility that the Texas House may flip to Democrats, and regardless of whether the House flips, there will be a race to replace the current House speaker, who will be stepping down (The Texas Tribune). • HHSC announced they are withdrawing some proposed cuts to women’s health, family planning and domestic violence programs, although the State continues to move forward with a hiring freeze for state eligibility workers (Dallas News). • As required by the Governor, HHSC proposed a $133 million reduction for the current budget in June (Texas Health and Human Services).

o HHSC identified $72 million in General Revenue (GR) savings across client services, program administration, program eligibility determination and enrollment services, regulatory oversight, and other administration.

o HHSC projects there will be sufficient additional lapsed funds for 2020-2021 to achieve the remainder of the reduction.

o Decreasing funds for women’s health programs and cutting staff responsible for processing eligibility for Medicaid, SNAP, and TANF, are included as part of the HHSC reductions (The Dallas Morning News).

Utah • February 25 update: On February 19, Utah State Senate and House of Representatives released updated revenue numbers for FY 2021 and 2022. The updated estimates “show the longstanding strength of Utah’s economy, despite unprecedented financial challenges due to COVID-19." The new estimates identified $112 million in additional ongoing revenue and $315 million in one-time revenue (Senate.Utah.Gov). • In January 2021, Governor Cox’s Recommended Budget for 2022 was released. A few social service budget highlights include:

o Pandemic Public Health Response: $100 million one-time General Fund allocation to support COVID-19 response (e.g., testing, surveillance).

o Medicaid Expansion: $130 million from the Medicaid Expansion Fund to serve the expansion population in FY 2022. Additionally, $36 million to be restored in General Fund to the Medicaid Expansion Fund that aims to promote structural balance between ongoing and future program expenditures.

o Behavioral Health: $450,000 for student financial assistance for behavioral health providers. This funding is also proposed to be used to increase faculty and operational support for Utah State University’s Master of Social Work program (Gomb.Utah.Gov).

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• In State Policy Reports’ quarterly Index of Economic Momentum, Utah claimed the top spot for Q4. The Index of Economic Momentum is based on three factors: personal income, employment, and population. Utah’s index score was 2.95% above the national average (Budget.Utah.Gov). • On January 4, Governor Spencer Cox (R) was sworn into office as Utah’s 18th governor (Salt Lake Tribune). • Utah’s November ballot included seven amendments to the Utah Constitution for voters to decide on. Of particular interest, Amendment G would make significant changes to how education and services for children and disabled individuals are funded. Since 1946, Utah’s Constitution allocated all income tax revenue to K-12 education and was extended to higher education in 1996. Amendment G proposed that social service programs for children and individuals with disabilities (about $600 million) be funded by dollars allocated for education rather than sales tax (Salt Lake Tribune). • In June 2020, the Utah Legislature approved $850 million in total budget cuts for FY 2021. The budget implements at least a 2.2% increase in the education fund and 5% increase in the social services coffers compared to the prior year (Salt Lake Tribune). • CMS approved a waiver effective January 1, 2020 to implement a modified version of ACA Medicaid Expansion. • The waiver includes enhanced federal funding (90/10) for expanded enrollment for individuals up to 133% FPL and includes work requirements, an enrollment cap, and directives to utilize employer sponsored insurance (NASBO, State Fiscal Conditions).

Vermont • Governor Scott presented his proposed budget of $6.83 billion for fiscal year 2022. $210 million of the package will address strengthening the State’s COVID-19 recovery. The budget does not include new taxes or fees and instead seeks to solve problems and fund projects that have been in development for years. Scott also called for education property tax exemptions for all childcare facilities, expansion of the state lottery to increase child are funding, and an end on taxing military pensions (Bennington Banner). • Vermont lawmakers support a bigger budget for Vermont’s single racial equity director, Xusana Davis. Davis is Vermont's first executive director of racial equity and is attempting to dismantle systemic racism within the state, as well as respond to communities of color that have been hit the hardest by the pandemic (VTDigger). • Vermont lawmakers kicked off the first 2021 legislative session largely focusing on coronavirus recovery, the allocation of hundreds of millions of dollars in federal money, how to stabilize the state budget currently in the red, and how to help starving businesses (WCAX). • Commissioner of Finance & Management, Adam Greshin, announced a public budget forum to receive comments on FY 2022 State Budget Development (Vermont Biz). • On October 24, Senator Jane Kitchel and Representative Catherine Toll signed a statement of legislative intent to provide for additional unemployment support, hazard pay, and health care stabilization.

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• In June 2020, Vermont’s Legislature appropriated $28 million for the Hazard Pay Program, which provided 16,000 public safety and health care workers with a one-time bonus of up to $2,000. However, those left out of financial support include low-wage, essential workers, particularly women and people of color. Governor Phil Scott signed the State’s fiscal 2021 budget earlier this month. The budget allocates $5 million for the Economic Stimulus Equity Program and an additional $22.5 million to expand the Hazard Pay Program (Vermont Biz).

Virginia • Governor Northam announced an additional $730.2 million in state revenues that can be used for a revised two-year spending plan. The additional revenue will help close the gap between the new revenues and the $2.7 billion cut from the two-year budget last (The News & Advance). • Governor Northam revealed $524 million in new federal funding that will go to the Virginia Rent Relief Program (RRP), which helps households and landlords with rent payments. The state will directly put $160 million into the program and will make additional funding available based upon need (WHSV). • Virginia’s sports betting industry is proving to be lucrative with experts predicting $5 billion in annual wagers, $400 million in annual operator revenue, and $60 million in state taxes. Regulators call for a 15% tax rate on sports betting revenue (Chatham Star Tribune). • The State’s General Fund revenue increased by a little more than 15% in December from the previous year. Governor Northam stated, “As we look ahead to a post-pandemic world, this continued solid revenue performance gives us confidence that we can meet our budget priorities, enhance our cash reserves and provide relief to Virginians who need it.” Total revenue collections increased 7.8% through December (Virginia Business). • Governor Northam proposed his budget amendments to the two-year budget plan in mid- January, focusing on higher education. He outlined several restorations to higher education, including restoring the Virginia Community Colleges System’s (VCCS) 3-G Last Dollar plus Workforce Initiative; the Massey Cancer Center at Virginia Commonwealth University; and Longwood University’s Early Childhood degree. The new proposed plan also adjusts the Coronavirus Relief Fund allocation for higher education to $116.3 million (Virginia Dogwood). • Governor Northam allocated an additional $20 million to support Virginia’s small businesses, which makes the relief fund reach a total of $120 million. These funds will go to businesses that applied for relief in 2020 but had their applications put on hold due to the exhausted CARES Act funding (WCYB). • State officials enacted a temporary policy change that will provide about $200 million to Virginia businesses that had to lay off employees during the pandemic. The Virginia Employment Commission will not count layoffs that occurred in April, May, or June of 2020 (WTOP). • Governor Northam proposed a two-year budget stating its intent is to help Virginians navigate the next phase of the crisis, with a focus on spending in the second fiscal year. The proposal restores roughly half of the $2.7 billion in spending that was frozen earlier due to the pandemic this year and includes an estimated $650 million deposit into the state’s reserve of cash. According to Finance Secretary Aubrey Layne, Virginia is showing increased revenue growth and that tax revenues could be $685 million above previous forecasts (The Washington Post).

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• Governor Northam sent the budget back to General Assembly in November. He offered 10 amendments to the two-year $135 million budget. The amendments would allow the State to create a bipartisan redistricting commission placed in the state constitution. Additionally, Northam proposed changes to a bill that protects some renters who have been impacted by the pandemic, as well as an additional $1 million to investigate the culture at the Virginia Military Institute, which recently dealt with accusations of widespread racism. He also signed two criminal justice bills, one of which is known as the MARCUS bill, which would create teams of mental health service providers and peer recovery specialists to accompany police officers responding to individual crises. The other bill would change sentencing laws to allow judges, rather than a jury, to sentence someone convicted in a jury trial (The Washington Post). • Two months after the special session started, Virginia lawmakers finally passed the state budget in October, which would give bonuses to police, pay for criminal justice reforms, and extend moratoriums on evictions and utility shutoffs during the pandemic. The budget is now in Governor Northam’s hands for approval (WTOP). • The Senate passed $134 billion two-year budget. One of the main differences between the Senate’s budget and the House’s version is the CARES Act funding; senators identified more than $140 million in savings changing managed care rates. The savings allow the Senate to fund dental benefits for adults, expand postpartum coverage, and expand health care access for lawful permanent residents, all through Medicaid (WAMU). • Two amended versions of the state budget advanced through first committees in the VA House and Senate. Both versions include additional funding for broadband expansion, assistance for renters and tenants, education and allocations to pay for criminal justice and policing reform. Other initiatives that were not included, such as pay raises for teachers, will be revisited in January 2021 (The Center Square). • Governor Northam announced there will be no layoffs or cuts to existing programs and essential services. In August, Virginia had $1.1 billion in unused reserve funds, taking a more conservative approach regarding State’s finances. Del. Sally Hudson, D-Charlottesville filed a budget amendment that proposes to use $2 million over the next two years to improve unemployment system (Virginia Mercury).

Washington • February 25 update: During the week of February 15, Washington’s House Republicans released a proposed budget that funds the State’s needs without raising taxes or cutting vital services. The House Republicans proposed budget triples the governor’s proposed expansion of community-based mental health treatment and increases Medicaid provider compensation (e.g., nursing homes, caregivers) (The Seattle Times). • In late January, Washington lawmakers released the outline for a COVID-19 relief bill aimed to boost vaccine distribution, bolster contact tracing, and support schools, renters, and small businesses. This $2.2 billion bill is funded in large part by federal aid dollars from previous relief packages ($440 million of state budget revenues) (The Seattle Times). • Governor Inslee released the first of three 2021-23 proposed biennium budgets. $397 million has been allocated to support Washington’s COVID-19 response including PPE, testing, contract tracing, public health, and vaccinations. Additionally, the proposed budget outlines a “covered

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lives assessment” on a per member/per month (PMPM) basis for health insurers, Medicaid MCOs, limited health services contractors, and third-party administrators. This assessment would raise $205 million in the second year of the biennium. In the 2023-25 biennium, this tax would yield $343 million (Washington.Gov). • State workers expressed concern that the $3.3 billion dollar shortfall through 2023 will have an overall impact on Washington residents. The Department of Social and Health Services has been asked to forecast a 15% budget. More details regarding these cuts will be available after the beginning of the 2021 legislative session starting on January 11, 2021 (Office of Budget Management and Public News Service). • The Washington State Economic and Revenue Forecast Council estimates that the Near General Fund revenue collections for the 2019-21 budget have increased by greater than $634 million. In total the Near General Fund revenues are estimated to be $51 billion for the two-year budget cycle (began July 1, 2020). At the end of the biennium, the projected increase would result in a net surplus of $1.8 billion. Governor Inslee will release the 2021-23 operating, capital, and transportation budgets in December 2020 (Office of Financial Management). • Over the weekend of November 14-15, Washington reported a consistent increase in daily cases with over 2,000 per day. On November 15, Governor Inslee announced a four-week statewide set of restrictions as a response to the spread of COVID-19. These restrictions are effective Monday, November 16 at 11:59 PM and extend through Monday, December 14. The State committed $50 million in aid to mitigate the financial impacts on businesses and their employees. In the near term, the State will focus $20 million in cash assistance for the hardest hit industries. • Washington State Department of Social and Health Services (DSHS), families, and caregivers convened on September 14 at a work session of the Joint Legislative Executive Committee on Planning for Aging and Disability Issues. This meeting was scheduled to discuss the Office of Financial Management’s request that state agencies propose potential budget cuts in response to the economic impact of COVID-19. The largest proposed cuts came from DSHS’ budget, amounting to more than $1 billion. This would make approximately 12,000 clients ineligible for services, and 8,100 beneficiaries would lose services and supports. Bill Moss, Assistant Secretary of the Aging and Long-Term Support Administration, suspects that this proposed budget will lead to “more hospital ER visits and admissions” and “homelessness and incarceration would be expected to increase” (The News Tribune). • The State experienced loosened business restrictions, improved tax collections, increases in cannabis sales, and improvements in the real-estate market. Considering these factors, the Washington Economic and Revenue Forecast Council now projects a budget shortfall of approximately $4.2 billion through 2023. This is nearly half of the original of the projected shortfall of $8.8 billion through 2023 (The Seattle Times). • Washington faces a projected $8.8 billion state budget shortfall through 2023 with about $53.3 billion impacting the 2019-2021 operating budget (The Seattle Times).

West Virginia • Senator Joe Manchin (D) led an amendment in the coronavirus relief package to provide additional funding to rural hospitals. Manchin argued that rural health care facilities are not

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receiving the funding necessary to continue services, let alone help in the pandemic fight. 20% of the $15 billion in the Provider Relief Fund will be designated to rural hospitals (WV Metro News). • West Virginia Treasurer Riley Moore (R) is seeking greater oversight of an agency that was reported to not be keeping updated records of a loan program. The Economic Development Authority’s $25 million Non-recourse Loan Program was intended to boost the State’s economy (Muscatine Journal). • Governor Justice, along with state and local officials, celebrated the groundbreaking of the Black Rock Wind Farm. The project hopes to incite innovation in West Virginia and is expected to supply over 200 local jobs and millions of dollars in property taxes to the two counties involved, as well as the state. When complete, the Farm will have 23 windmills, which will increase the State’s wind capacity by 15% (WVNSTV). • West Virginia’s top officials, specifically Governor Jim Justice and Senator Craig Blair, wish to cut out the state income tax, though personal income taxes make up for 43% of the General Fund (or almost half of how the State pays for the services of state agencies). Furthermore, West Virginia has dipped into money set aside for Medicaid expenses to meet the General Fund demands over the last few years. This issue has caused much controversy in the State, especially considering it would mean making an ambitious change to the tax code during a pandemic (West Virginia MetroNews). • Congress decided to allow the CARES Act money to carry over into 2021, and West Virginia has roughly $730 million available to spend. $300 million is believed to be reserved for the unemployment trust fund, but the allocation of the rest is still to be determined. State auditor J.B. McCuskey believes the State’s conservative approach to spending will pay off in 2021 as the State will look to help small businesses (MSN). • In November, West Virginia had more than $764,000 to spend in CARES Act dollars by the end of December. Should the federal government allow an extension, the State plans to use the funds toward large expenses at the beginning of 2021, such as costs for unemployment and COVID-19 testing. Before July 1, West Virginia allocated $287 million for unemployment. From July 1 to December 30, the amount went up to $300 million (West Virginia MetroNews). • The State’s oil and gas industry is working with the West Virginia State Tax Department to cut its property taxes by as much as $62 million per year. The State Tax Department released a draft rule change on how oil and gas personal property is appraised and taxed. If the draft rule is implemented, it would force either cuts in local government services or shift more tax responsibility onto residents and other businesses. The rule would also remove all limits on the post-production expenses gas producers can deduct from their property tax liability, which would lower tax revenue collections by about 50% (The Register Herald).

Wisconsin • February 25 update: Governor Evers proposed $2.4 billion for building projects in the state and $163 million for a new state office in Milwaukee. About $1 billion of the $2.4 billion will go directly to the University of Wisconsin System. Further, Evers said his proposal prioritizes

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funding for corrections and health services facilities, state parks and forests, and veteran homes (CBS Local). • Tommy Thompson, President of the University of Wisconsin (UW) System announced he was warned by state legislature to not include tuition increases in his budget; otherwise, the budget will not get approved. In December, the Wisconsin Policy Forum released a report showing state and local tax appropriations fell from $10,333 per student to $6,846 per student, which is well below the national average. The budget panelists named the eight-year tuition freeze imposed by state lawmakers as the main reason of financial issues at the universities. Thompson seeks a $96 million increase in state revenue for the UW System (Wisconsin Public Radio). • State legislature approved reimbursing Milwaukee and Dane counties for costs incurred during the election recount requested and paid for by Donald Trump. The recount costed the counties a total of $2.4 million, which was less than the original projection of $3 million (Star Tribune). • Governor Tony Evers will use some of the CARES Act dollars to fund staff members in hospitals and nursing facilities across the state. The Department of Health Services and the Department of Administration will contract with a staffing agency to hire personnel (Milwaukee Journal Sentinel). • Revenues were down 22% from March to May 2020. In April 2020, Governor Evers said revenue shortfall would be over $2 billion over the next year. He ordered a 5% cut to state operations, saving $70 million, $41 million of that coming from the University of Wisconsin System (NPR).

Wyoming • The Joint Appropriations Committee’s (JAC) version of the budget bill reduced Governor Gordon’s recommendations by ~$2.5 million. JAC also rejected a proposal to defund the State’s home health aide services program which currently allows older residents to receive in-home services and aims to save the State millions in nursing home expenditures. However, JAC did not fund the program ($2.7 million), thus financing will be discussed by the Legislature later in the year (Star Tribune). • The 2021 General Session scheduled for January 12, 2021 has been rescheduled to January 27, 2021 (Wyoming Legislature). • Following Governor Gordon’s request for $500 million in funding cuts, the Department of Health decreased the budget by $47 million. Of the proposed $47 million budget cut, $3 million comes from the elimination of programs and services for children with complex mental, emotional, and behavioral health needs. The High Fidelity Wraparound Services provided by Wyoming Medicaid and Magellan are estimated to cost $15,000 a year per child. However, advocates and the Department stipulate if the Legislature approves the funding cut to child programs, there will be an increase in the number of institutionalized children (Wyoming Public Media). • On November 16, Governor Gordon released the Wyoming State Budget 2021-2022 Supplemental which reflects the current economic status of the state. In 2020 there have been approximately $515 million in reductions and 380 state positions eliminated. Currently, Wyoming’s Department of Health is the largest General Fund supported agency. Governor Gordon’s proposed $135 million in cuts to the Department by reducing services to elderly populations, decreasing health care coverage for children, reducing Medicaid payments to

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providers, and reducing mental health and SUD services (Wyoming Administration & Information). • Earlier in 2020, Wyoming Legislature announced a $1.5 billion budget shortfall due to COVID-19. As of October 2020, Wyoming Legislature is estimated to have a quarter of a billion-dollar shortfall instead (Wyoming State Government Revenue Forecast). • The Wyoming Department of Health will assume responsibilities for around 3,300 low-income children through CHIP. Shifting these responsibilities from Blue Cross Blue Shield to the Wyoming Department of Health will save the state and federal government more than $10 million (more than $3.6 million and $6.8 million, respectively) (Casper Star Tribune). • In July 2020, Governor Gordon approved more than $250 million in state budget cuts for the current two-year budget cycle.

o The Department of Health, which is the State’s largest budget will see a 9% cut in funding totaling $90 million.

o Even with budget cuts Wyoming will still have a forecasted shortfall of more than $600 million (KIFI Local News). • In 2020, the Wyoming Department of Health expected to see a $28 million reduction in benefits it pays for health care for some Wyoming residents and will lead to limits on services in some instances.

o Of the nearly $254.5 million in cuts in spending from the State’s General Fund, the Department saw the largest reduction, nearly $89.1 million.

o More than a quarter of this amount, almost $28.2 million will come from cuts in reimbursements to health care providers from the State. This will result in a 2.5% decrease in reimbursement rates for health care providers and through service reduction.

o Another spending reduction of almost $3.7 million will be seen in the State’s Children’s Health Insurance Program (CHIP) (Cowboy State Daily).

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