State Budget Tracking Summaries Updated January 7, 2021

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Table of Contents Alabama...... 3 Alaska ...... 3 Arizona ...... 4 Arkansas ...... 5 California ...... 5 Colorado ...... 7 Connecticut ...... 9 Delaware ...... 10 District of Columbia ...... 10 Florida ...... 11 Georgia ...... 12 Hawaii ...... 13 Idaho ...... 14 Illinois ...... 15 Indiana...... 15 Iowa ...... 16 Kansas ...... 17 Kentucky ...... 17 Louisiana ...... 18 Maine ...... 18 Maryland ...... 20 Massachusetts ...... 20 Michigan ...... 21 Minnesota ...... 22 Mississippi...... 22 Missouri ...... 22 Montana ...... 23 Nebraska ...... 24 Nevada ...... 25 New Hampshire ...... 25 New Jersey ...... 26 New Mexico ...... 28 New York ...... 29 North Carolina ...... 31 North Dakota ...... 31 Ohio ...... 32 Oklahoma ...... 33 Oregon ...... 34 Pennsylvania ...... 35 Puerto Rico ...... 36 Rhode Island ...... 37 South Carolina ...... 37 South Dakota...... 38 Tennessee ...... 38 Texas ...... 39 Utah ...... 41 Vermont ...... 41 Virginia ...... 42 Washington ...... 43 West Virginia ...... 44 Wisconsin ...... 45 Wyoming ...... 45

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Alabama • 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 new 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. 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 • January 7 update: The governor is scheduled to introduce an executive order to split the Department of Health and Human Services into two separate entities when the legislative session starts in mid-January. 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). • A new COVID-19 disaster declaration was announced by Governor Dunleavy on November 6 to extend the emergency declaration issued in March, which is set to expire 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. State law mandates that the Legislature must vote on whether the extension can last longer than 30 days (US News). • Medicaid enrollment has grown by about five percent over the last six months and currently covers 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 public health emergency 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

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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). • Governor Dunleavy and legislature reduced the Medicaid budget by about $170 million but did not pass a supplemental budget (US News). • 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).

Arizona • The state announced plans to release a request for proposal (RFP) in August 2021 to replace the current Regional Behavioral Health Care program for individuals with serious mental illness, as well as add new benefits (State of Reform). • On December 5, the Arizona Health Care Cost Containment System (AHCCCS) posted that it will compile and submit public comments together with its 1115 waiver renewal request to CMS by December 31. • Arizona received more than $4 billion in CARES Act funds and has 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). • 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). • AHCCCS announced plans to release a Competitive Contract Expansion (CCE) RFP on August 4, 2021, which will replace the state’s current integrated Regional Behavioral Health Care program. AHCCCS plans to expand the provision of services for at least one AHCCCS Complete Care (ACC) Plan in each Geographic Service Area (GSA) to include integrated services for Title XIX/XXI eligible individuals determined to have a Serious Mental Illness and utilize a competitive process called a CCE. The effective date for this change will be October 1, 2021. AHCCCS is exploring options for the future administration of Non-Title XIX/XXI funded services including but not limited to crisis services, housing services, grant funded services, and court ordered evaluations. These services may or may not be included in the expanded services transferring to one or more ACC Plans in each GSA. AHCCCS may opt to utilize an open RFP process for one or more of these services. • 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

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services for formerly incarcerated individuals were advanced more than $41 million in scheduled payments (AHCCCS). • Arizona proposed ballot measure (Proposition 207) before voters on November 3 to legalize recreational use of marijuana for adults. The ballot includes a 16% retail excise tax on top of the existing 5.6% sales tax (NASBO). • AHCCCS has posted its draft renewal 1115 waiver renewal for public comment. The waiver renewal request is due to CMS December 2020. AHCCCS will accept written comments through November 30 and will host a series of public forums in October and November (AHCCCS). • Although the State’s shortfall is not as great as originally anticipated, AHCCCS has opted to not move forward with more its comprehensive Whole Person Care Initiative as part of its 1115 waiver demonstration renewal (due December 2020). Instead, the state will focus on activities that can be achieved within existing waiver parameters.

Arkansas • 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). • Governor Hutchinson stated that Arkansas is seeing a surplus in revenues and that the budget is currently balanced (Courier News). The State has upwards of $200 million in surplus or reserve funding that can be used to help cover additional costs going forward, for example the 25% state share of unemployment benefits.

California • January 7 update: In Governor Newsom’s COVID-19 update on January 4, he stated the State’s current budget proposes $300+ million for vaccines. This funding is allocated for information technology, logistics and commodities, and public education campaigns (LAist). • 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). • Alex Azar, HHS Secretary, 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. At this time, it is unclear how Secretary Azar would enforce this budget withhold since he will remain in his role for another month. If confirmed, Xavier Becerra, California’s attorney general will replace HHS Secretary Azar (CNN).

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• California’s Legislative Analyst Office (LAO) projects the state will have a $26 billion onetime windfall. In the report, the LAO says that 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 recommends 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. o On December 4, 2020, DHCS will conduct a webinar for stakeholder input and recommendations for a proposed strategy to utilize the $5 million supplemental funding from CMS made available through the MFP demonstration program.

o Some of the funding may be used to commission a statewide gap analysis and multi- year roadmap for HCBS and MLTSS programs and provider networks (Significant Updates of Interest to DHCS Stakeholders). • On October 29, the Substance Abuse and Health Services Administration (SAMHSA) approved $70 million in grant funding for the expansion of the CalHope campaign (Significant Updates of Interest to DHCS Stakeholders). • 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 budget deficit is most notably from:

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

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(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 1) Policies to Cut Costs for Prescription Drugs: Governor Gavin Newsom of California’s budget for fiscal year 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 2) 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 • January 7 update: The Colorado Department of Health Care Policy & Financing (HCPF) is scheduled to go before the Joint Budget Committee on January 7. They will provide a comprehensive overview on key topics including strategies related to health care affordability. HCPF has grown to serve about 1.4 million people, or 1 in 4 Coloradoans ( • 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, 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. Lawmakers are currently awaiting release of the December 2020 budget forecast, which will dictate what can be accomplished during the upcoming January legislative session (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. • As of early December, Colorado is reporting more than a 12% increase in unemployment claims, most of which are in the services/restaurant service industry (KRDO). • 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

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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 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). • Colorado is projected to pass its ballot initiative to increase existing cigarette taxes with a new tax on e-cigarettes with 68% in favor of the measure with 85% of the votes tallied. A portion of the funds will go to a state fund for Medicaid, children’s health care, and primary care programs. The State has not listed a specific amount.

o A new amendment that would give voters more power to approve of new state enterprises, which are government-owned businesses that provide services for a fee or surcharge, is winning (with 85% of the vote in, 52% of voters backed the measure). The amendment requires voter approval for any new state enterprises funded by fees that have a revenue of $100 million or more in the first five years of operation. The ballot measure has received criticism and opposition from some health care provider groups. Advocacy group Colorado Consumer Health Initiative stated the ballot measure could imperil the Hospital Provider Fee, which helps fund rural hospitals and Medicaid coverage. The group also said that the funds from that fee could be subject to the requirements created under the ballot measure (Fierce Healthcare). • In June 2020, Colorado enacted a reduction in rates paid to providers who care for a subset of the state’s elderly. It also approved an increase in member co-pays to the federal maximum permitted, which yields savings of $2.14 million to the General Fund in FY 2021 and FY 2022 (Colorado.gov). • Colorado’s legislative session concluded June 15. Reductions to the Department of Health Care Policy & Financing (HCPF) affected provider reimbursement rates, member co-pays, some benefits, and administrative funding. Examples include:

o Upon federal approval but no earlier than January 2021, member co-pays will increase to the federal maximum and the adult dental benefit cap will be reduced to $1,000 (from $1,500).

o Reduces annual nursing facility rate increase from 3% to 2%. o Delayed implementation of behavioral health wrap-around services for children at risk of out-of-home placement.

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Connecticut • January 7 update: The State’s projected budget deficit has fallen to 640 million, which is down from $2 billion three months ago with improved tax collections and reduced spending. Tax collections for this month are now expected to be up by $180 million compared to last month (MSN). • Governor Lamont is expected to present a budget proposal in February, 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 fiscal year 2022; $1.2 billion in fiscal year 2023; and $917 million in fiscal year 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 to increase to approximately $13.54 billion by 2024, which it will then consume nearly 55% of the budget (Yankee Institute). • In his monthly financial and economic update, Comptroller Kevin Lembo projected a deficit of $1.26 billion for Fiscal Year 2021, while noting economic improvement for some and a darkening reality for others (Office of the State Comptroller). • Connecticut’s fiscal picture improved slightly from September, but the State still faces $1.2 billion budget deficit. Additionally, the budget picture remains incomplete. The deficit is about 6.3% of general fund spending, but it had been as much as 10% just last month (CT News Junkie). • Connecticut finished the recently completed fiscal year 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 that is expected next week in the state Senate and the following week in the state House of Representatives. Legislators will also not make any major changes to the police accountability bill that was passed less than two months ago (Hartford Courant). • Connecticut’s comptroller projects a deficit of $128.1 million for fiscal 2020 with the deficit being addressed through a transfer from the budget reserve fund (Republican-American). • 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 will send $100 million in aid to hospitals (The Day) and will be distributing an additional $160 million in federal funds to help school districts safely reopen and cover costs related to the COVID-19 outbreak (Republican-American).

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• 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. State legislators, who met in special session in July to adopt police accountability and absentee ballot measures, have talked about possibly returning to the Capitol in September for another special session to amend the current budget (ctPost).

Delaware • January 7 update: 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). • In accordance with 29 Del. C. §6332, the Office of Management and Budget (OMB) will hold virtual public hearings from November 9, 2020 through November 20, 2020 to review and take public comment on each state agency’s Fiscal Year 2022 budget request (Delaware.gov). • Despite fears that COVID-19 would destroy state revenues, leading to higher taxes and fees, Delaware is on track to have a $149 million surplus for the fiscal year 2022 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 • 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).

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• The Metro has proposed a new 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 projects for the future years, FY 2022, FY 2023 and FY 2024 by $210 million, $190 million and $170 million, respectively (Bis Now). • Washington Metropolitan Area Transit Authority (WMATA) faces $212 billion shortfall this fiscal year. 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). • Thinking of cutting $500 million from upcoming year’s budget to offset 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).

o Revenue estimate coming September 30.

Florida • 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 that significant cuts to the budget will be needed to weather the financial hit COVID has had on the state (Tampa Bay Times). • State economists estimated that 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 (Tampa Bay Times). The State has $4 billion in reserve funding to help 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.

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Georgia • January 7 update: 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, 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 last year. 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 indicate that 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 are 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.Governor CMS stated that 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 the Affordable Care Act 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).

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Hawaii • 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). • 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 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 has 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 is proposing 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). • Hawaii released its latest enrollment numbers. Medicaid enrollment continues to trend upward in the State reflecting the maintenance of effort requirements in place as a result of the national public health emergency, as well as more individuals becoming eligible for Medicaid as a result rising unemployment (Hawaii.gov). • Hawaiians who have lost health coverage due to the pandemic are urged to seek health care coverage through the ACA marketplace (HealthCare.gov). While most individuals who lose health coverage usually have a 60-day special enrollment period to access ACA coverage, the special enrollment period has been extended as a result of the COVID-19 national emergency. The Hawaii Department of Commerce and Consumer Affairs Insurance Division issued a press release urging residents to apply for coverage as soon as possible (US Politics). • Similar to other states, the Hawaii Department of Human Services reports that Medicaid enrollment has 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 $770m or 11%, combined with a slower than anticipated rebound. • In addition to state agency budget cuts which will include 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 (Hawaii News Now).

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• In May, 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 • In January 2021, Governor Brad Little will propose 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). • Idaho currently has a little more than $600 million in their 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 public health emergency, Idaho’s revenues have not fallen as much as previously anticipated (e.g., curbed state expenditures, lower law enforcement costs, increased FMAP). The state’s budget director, Alex Adams, explains that the state is currently 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 in the state (Johns Hopkins, Coronavirus Resource Center). • Lawmakers reviewed the state agency budget request last week 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 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 At this time, the State’s Budget Stabilization Fund, aka rainy day fund, has 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 will go to the legislature in January 2021 (Argus Observer). • Restoring budget cuts due to revenues came in strong despite COVID-19 impact. New guidance was released, which allows CARES Act funds from states’ shares to be spent for COVID-19-

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related education expenses including technology and personal protective equipment, with up to $500 per student presumed to qualify as COVID-related (Idaho Press Tribune).

o There are plans for a $50 million fund that would go directly to Idaho families under a new “Strong Families, Strong Students” initiative. This program would be open to all school-age children. Eligibility will be needs-based and income-based. • Lawmakers approved two election-related bills and a third bill that would shield businesses and schools from coronavirus-related lawsuits during special session. House Bill 1 guarantees in- person voting would be allowed in some form across Idaho, regardless of any emergency orders in effect. Senate Bill 1001 would buy more time for county clerks to process the expected large influx of mail-in ballots for the November general election (KTVB).

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 five percent 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). • Illinois passed budget expects a $5 billion deficit in fiscal year that started July 1. The plan is to borrow from the Federal Reserve’s Municipal Lending Facility and pay back with expected forthcoming aid from the federal government. Also, the State passed a proposed constitutional amendment to levy a graduated income tax with higher tax rates on higher incomes.

Indiana • Indiana recently conducted a two-year revenue forecast that projects 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 have 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

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$800,000 from 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). • The State is facing at least $1.7 billion shortfall for FY 19/20 and another $2 billion in FY 20/21. In May, Governor Holcomb ordered state agencies to cut 15% for FY 20/21.

Iowa • January 7 update: State revenue projectors estimate 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). • State budget experts believe 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 fiscal year 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 fiscal year 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 last year (Associated Press). • Governor Reynolds is currently awaiting state revenue projections, which will be available until mid-to-late December. Previously she 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). • The city of Des Moines anticipates that it will lose about $25 million in revenue this fiscal year 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 is also down by more than $1 million. City Manager Scott Sanders stated that 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). • Republican lawmakers plan to return to the state Capitol in January to discuss legislation related to COVID-19. The newly elected lawmakers have begun to prepare for the session, which will begin January 11. Pat Grassley, speaker of the Iowa House, stated he does not expect there to be a mask mandate (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).

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• State experts predict 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).

o Governor Reynolds is looking to revive her tax plan next session. Compared to other states, Iowa has weathered the pandemic in terms of revenue. She plans to renew her call for her tax-swap plan to focus on water quality, mental health, and income tax relief. Her plan seeks a 1% sales tax increase while cutting state income taxes by 10% to fund these initiatives (The Gazette). • 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, 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 • Sales tax from is up by almost $50 million from this time last year, and about two-thirds of the sales tax is from online sales (The Center Square). • 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). • The State is anticipating an estimated shortfall between $600-$700 million for fiscal year 2021. Governor Kelly’s budget-balancing plan includes $40 million in spending cuts, although it is unspecified where these will be applied (US News).

Kentucky • Kentucky lawmakers are prepping for another COVID-19 related session in January. They will discuss passing another one-year budget, reductions in state revenues, job growth, COVID-19 relief, education, and health care (Kansas City Starv). • Kynect, a state-run web portal designed to help Kentuckians sign up for health coverage and other assistance programs was relaunched by Governor Beshear. The program will provide access to the national health benefit exchange, but by January 2022 it is expected to switch back

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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 • 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 before it pays out grants to all eligible small businesses and local government agencies seeking funds from COVID-19 aid programs. Last week the 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). • In order 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 • Maine lawmakers will reconvene in January to discuss balancing the State’s budget. Republicans and Democrats have agreed to create a new two-year spending plan. Currently Maine is facing 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

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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 September 2020 compared to the same time in 2019. The grants could cover payroll loss, rent, utilities, operating expenses, and more (News Center Maine). • Maine’s revenues exceeded projection in October, which marks the third month in a row that the State has exceeded projections. In October revenues were up by 27% or $78 million, largely due to an increase in taxable wages and spending, as well as a boost in federal aid. However, without a second stimulus the State’s positive economic activity is likely to drop (Bangor Daily News). • When asked for more funding for the state public defense agency Maine Commission on Indigent Legal Services (MCILS), Governor Mills said she was hesitant. Commissioners appointed by Governor Mills asked that she double 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). • The Department of Administrative and Financial Services announced it will help residents avoid burdensome and double tax payments due to COVID-19. In January, the Mills administration will introduce legislation to ensure residents avoid double taxation due to COVID-19 related telework by allowing the tax credit for income tax paid to other jurisdictions if another jurisdiction is asserting an income tax obligation for the same income, despite the employee working remotely. Governor Mills has instructed Maine Revenue Services to allow residents to maintain the same withholding and estimated tax payment status used prior to the pandemic (PenBay Pilot). • Revenues for hotels, restaurants, and fuel were still low, but they were not as low as anticipated by budget forecasters. Taxable sales for hotels and lodging were down $100 million (40%) from last July, and restaurant sales were down $105 million (30%). However, forecasters originally expected hotel and lodging sales to fall 57%. Individual income tax revenues fell by $32 million. In August, Maine ended $34 billion over budget (The Portland Press Herald). • Governor Mills signed order that maintains budget stability/balances upended budgets. Order adopts recommendations from Dept. of Administrative and Financial Services, curtails allotments to State’s General Fund by nearly $221.8 million and to Highway Fund by $23 million. In total the curtailment is almost $245 million. Order also helps avoid layoffs, replaces ~ $97 million in State spending with one-time federal funding from CARES Act and adopts ~$125 million in departmental cost savings and efficiencies. Order is effective September 17 (News Center Maine). • 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

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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 • January 7 update: On December 17, Governor Larry 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, 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) on Friday 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. • Maryland’s Department of Budget and Management is preparing the governor’s budget request that is due to the General Assembly on January 15, 2021 (Maryland Matters). • Maryland voters approved the General Assembly to make changes to the state budget, as mentioned in the below bullet. Voters also approved the legalization of sports betting, which is linked to education funding. The question on the ballot stated that sports betting was “for the primary purpose of raising revenue for education” (The Baltimore Sun). • Maryland voters can vote whether to authorize the General Assembly to make changes to the state budget as long as those changes do not cause the budget to exceed the total amount submitted by the governor (The Patch).

Massachusetts • January 7 update: 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

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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 the fiscal year began in July 2020. The Governor signed a third interim budget into law on October 26, authorizing $5.4 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 that September revenue collections were 1.4% less than actual collections in September 2019. However, FY 2021 year-to-date collections total approximately one percent 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 Department of Revenue expects to finish processing the fiscal 2020 tax revenues in September, which will give state budget writers a better idea of how bad of a shortfall Massachusetts faces in the wake of COVID-19. Massachusetts lawmakers say the state’s financial picture remains too hazy and the prospect of a federal stimulus package too uncertain for them to draft a full-year budget (MSN). • The state Legislature extended its two-year session, which traditionally ends July 31, to try to reach deals on several priorities, including a budget. While some conference committees continue to meet, most lawmakers have focused on the September 1 state primary (Mass Live). • 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 • 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. 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). • Fiscal year does not start until October 1. The governor and legislature will continue to consider the fiscal 2021 budget (NASBO).

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Minnesota • State officials confirmed that 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 (The Star Tribune). • Budget deficit projected to be $2.4 billion for current 20-21 biennium and possibly $4.7 billion for 22-23 biennium (news report on MN OMB report July 13). • $2.7 billion reserve fund (rainy day) (Governor Walz testimony to House Committee).

Mississippi • 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 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. • For FY 2020, lawmakers said the governor could dip into the State’s rainy-day fund to cover an estimated $47 million shortfall in the $6 billion budget. The estimated shortfall for FY 2021 is around $275 million, much lower than original projections. Lawmakers are looking at making cuts around 4.8% to state agencies.

Missouri • Governor Mike Parson and legislative leaders estimate Missouri will collect about $9.78 billion in revenue in FY 2022, which is approximately $200 million less than what officials originally predicted (Kansas City Star). • 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). • A new report estimates that 6.5%, or 95,000 Missouri children were uninsured last year. The number of uninsured children has increased by more than one third since 2016. However, the number of children enrolled in Medicaid in Missouri has increased substantially since steps were taken to protect coverage during the COVID-19 public health emergency, adding over 77,000 children to Medicaid (Missouri Budget Project). • With Missouri’s economy rebounding better than projected, Governor Parson plans on restoring $133 million of the $448 million budget cut that went into effect on July 1. The $133 million, includes $38 million in general revenues and $94 million in approved federal funding.

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o In June, the projected unemployment rate in October was 16.3%, but it currently stands at about 7%. Since March, 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). • In June, 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 in order to balance the state’s fiscal 2021 budget.

o If revenue collections improve in FY 2021 Parson’s has stated that he is willing to release some of the withheld revenues (St. Louis Post-Dispatch). • 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).

Montana • January 7 update: On January 5, Governor Greg Gianforte (R) took the oath of office as the State’s 25th governor (Montana.Gov). • Governor Steve Bullock’s final budget proposal for the 2023 biennium focuses on protecting essential services and investing in economic recovery and education. This budget plan includes 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 December 1, Governor Bullock announced that $1.6 million of federal grant funding will be used toward a new crisis counseling hotline. The purpose of this hotline is to help Montanans struggling with their mental health due to the ongoing COVID-19 public health emergency. Those in need of crisis counseling can call 1-877-503-0833 or text MT to 741 741 for free counseling services (Monday-Friday, 10am-10pm MST) (Montana.gov). • On November 20, Governor Bullock reported that 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 early October, 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 looking to legalize 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, Governor Bullock stated that the State is heading into the pandemic 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. Montana has $620 million in reserves as it begins the next fiscal year. General fund

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balance is estimated at $452 million, which is enough to cover the decreased revenues (Great Falls Tribune).

Nebraska • January 7 update: State lawmakers will convene on January 6, and one of the priorities is property tax relief. Last session, 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 recently signed an executive order that extends 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 that the State will collect an additional $285 million in the current fiscal year. Originally, the Board predicted that Nebraska was set to collect about $4.7 billion in the current fiscal year (Tulsa World). • CMS has 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.

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). • Nebraska collected $68 million more in net tax revenue than expected in August. Sales taxes came in at about $40 million, which is 19.2% higher than the most recent forecast. Individual income taxes came in at 10.1% above forecast. Further, the Nebraska Economic Forecasting Advisory Board lowered projections of state tax revenues by about $50 million for the fiscal year ending June 30. Nebraska remains strong compared to many other states (Omaha World Herald). • Governor Ricketts signed budget adjustments, which includes flood relief, community health centers, and scholarships (Lincoln Journal Star).

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

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Nevada • 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 forum will meet again in December to provide its general revenue forecast for the upcoming legislative session (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 has taken 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 (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. 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. • Nevada’s final budget passed July 18, includes a 6% across-the-board provider payment rate. It also requires most state employees to take 48 hours of unpaid leave (furlough) between January and July 2021. • 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 • The New Hampshire’s Department of Revenue Administration recently released reports that show the state has exceeded state revenue projections. Business tax revenues were much higher than forecasted, while the hospitality and tourism sector continued to be down as a result of the pandemic (Laconia Daily Sun). • Governor Chris Sununu said the state is in a much better position than originally predicted at the beginning of the pandemic. He has asked agencies to submit efficiency budgets (budgets that do

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not add services) that were less than spending authorized for the current fiscal year 2021 (The Eagle Tribune). • Nashua schools in Hillsborough County are likely to lose $6 million in state aid next year 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). • The State netted $4.6 million to date from sports betting since launching in December 2019 (New Hampshire Public Radio). • A new $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 has filed a lawsuit and is asking the Supreme Court to eliminate a regulation that requires residents employed by Massachusetts-based companies to pay income taxes while working 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 have seen a 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). • Enacted budget bills for FY 20-21 Biennium anticipated one-time appropriations of $23.6 million in one-time initiatives (NASBO). • Between March and July, 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 • Four republican members of the Senate Budget & Appropriations Committee in New Jersey have 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

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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). • Bergen County of New Jersey approved a $28 million borrowing plan, as COVID-19 cases continue to rise (NorthJersey.com). • 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. 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). • 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, last week 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). • Recently 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 is receiving criticism from trade groups, exchanges, and online brokers. They say 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

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allocated $3.1 million to hire lawyers. This year he has allocated more than $6 million (Documented NY). • The NJ Department of Human Services recently launched The New Jersey School-Age Tuition Assistance Program that can help pay for care for a school-age child in need of childcare as a result of COVID-19 remote learning. Funding is available for parents with incomes up to $75,000 in need of full or part-time assistance for children between the ages of five and 13. These funds are available between September 1, 2020, and December 30, 2020, or until funding runs out. The Department has allocated $150 million toward this initiative (State of New Jersey). • 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). • 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 • According to new revenue figures released the first week of December by legislative and executive branch economists, New Mexico appears 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). • New Mexico Medicaid enrollment is approaching 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). • State could have anywhere from $6.8 billion to $7.6 billion available in the coming budget year, according to new revenue figures from legislative and executive economists. That is up

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significantly from the $6.2 billion estimate from June but much lower than the pre-pandemic projection of slightly more than $8 billion. Currently, the State’s budget for the fiscal year that started in July authorizes about $7.2 billion in total spending, after being pared back by lawmakers during a special session this summer (Albuquerque Journal).

o The State’s cash reserves could be even larger than previously projected — more than $500 million over the June estimate— as construction activity and better-than-expected consumer spending boosted state gross receipts tax collections during the first half of 2020. However, some of that consumption was supported by expanded federal unemployment benefits, stimulus checks, and other temporary measures. • Local governments in New Mexico said revenue has been propped up by surprisingly strong sales taxes. However, "that sugar high from the federal stimulus will fall off, and our communities will be affected," said A.J. Forte, executive director of the New Mexico Municipal League. Governor Michelle Lujan Grisham is urging the Legislature to legalize and tax recreational marijuana as a way to shore up state revenue (Modern Healthcare). • Governor Lujan Grisham is directing 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. Some exceptions apply. The administration says 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 to revise the State’s budget in light of an estimated $2 billion budget gap resulting from a decline in state revenues. Governor Lujan Grisham authorized an amended state budget on June 30, restoring funding for certain priorities by vetoing more than $30 million in cuts (Office of the Governor).

New York • 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). • Tax receipts in November for New York were higher than anticipated, but revenues were still down by about $3 billion compared to last year (Spectrum Local News). • A report by the Albany Business Review found New York state and New York City are facing 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’s MTA needs $12 billion of federal fund by the end of March to avoid major budget cuts. The MTA will reveal its 2021 budget proposal this week. Without additional federal funding, the MTA will have to include service cuts to their commuter rail and subway. The MTA also revealed that it will likely have to lay off over 8,000 employees (Bloomberg Quint). • 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). • New York state has legalized marijuana. The legalization is expected to bring in $300 million in annual tax revenue, which the Cuomo administration considers a conservative estimate (New York Daily News). • New York City’s Learning to Work program is getting cut by $10 million, which means several counselors could lose their jobs. The program funds paid internships and additional counselors for roughly 16,000 students at city transfer and night schools. The $10 million cut would be for the remainder of the year, which is 25% of its overall budget (New York Daily News). • 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). • In August, the State reported significant tax revenue drop. Personal income tax collections were 6.4% lower than last year, and the State relies heavily on income tax collections (Albany Business Review). • 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). • Governor Cuomo issued a letter in July to NY Congressional Delegation calling to ensure $500 billion in unrestricted state aid is included in any Senate passed relief package. • Revenue had fallen $1 billion more than expected, mainly due to tax collections. Cuomo administration has begun withholding $1 out of every five in local aid while it sees whether federal funds will be forthcoming (The City).

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o Sales tax revenue for local governments dropped by 27% during the second quarter (Spectrum Local News).

North Carolina • Tax revenue for fiscal year 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 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 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 • 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 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

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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 seeks to save 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 Augusta, 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). • State estimated ending fund balance at end of this biennium is $160 million due to strong tax collections prior to the pandemic (KFGO). • Revenue adjustments include $100 million transfer from legacy fund, $382.2 million from strategic investment and improvements fund, and $140 million from other special funds. • 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 • 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 new 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 current fiscal year due to the ongoing COVID-19 pandemic, according to House Majority Floor Leader Bill Seitz, a Cincinnati Republican. He stated he does not believe that lawmakers will include a tax increase in their budget to cover the

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financial shortfall for the 2021 fiscal year. He recommends using the State’s $2.7 billion rainy day fund (Cleveland.com). • Medicaid caseloads have increased by nine percent 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). • The Ohio legislative budget panel approved $420 million in federal coronavirus funding, which will be broken down into the following:

o $125 million for small businesses with less than 25 employees in the form of $10,000 grants.

o Bars and restaurants are eligible to receive $2,500 each for a total of $37.5 million. o $62 million for critical access hospitals and rural hospitals o $100 million for higher education o $50 million for rent assistance for low-income renters o $25 million for non-profits o $20 million for arts groups (CBS Pittsburgh).

Oklahoma • Priorities for the upcoming legislative session that begins February 1, 2021, include funding Medicaid expansion, redistricting, and the state budget for 2022. Lawmakers have yet to come up with a plan for Medicaid expansion. Regarding the expansion, Senate Minority Leader Kay Floyd, D-Oklahoma City, expressed her concern that proposals to implement managed care were “rushed through” without legislative input (Tulsa World). • Gross tax receipts for November were $970.5 million, which is about two percent 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 will receive a pay raise for the first time in more than 20 years. Their salaries will jump to $47,500 from $35,021, which is a 35% increase. This will take effect November 18, 2020. The pay raises are funded through the $7.7 billion state budget. At this time there are no plans for another pay increase in 2021 (Lawton Constitution). • The Budget Board voted to reallocate $15 million of the CARES Act funds to a program that helps struggling businesses and organizations. Originally, the funding was allocated to Oklahoma County’s jail trust (KFOR). • Tax receipts have 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

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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 this year 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 prevention programs, cancer research, and other initiatives to improve Oklahoma residents’ health (The Oklahoman). • Oklahoma will raise unemployment taxes in 2021. The Oklahoma Employment Security Commission predicts that the unemployment fund will receive $550 million to $600 million due to the tax increase (Public Radio Tulsa). • The General Revenue Fund collections estimate for September was 1.7% higher than anticipated. Unemployment remittances and federal stimulus are inflating total income tax collections (KOKH). • According to Oklahoma’s Tax Commission, the State could lose more than $200 million per year in income and sales tax revenue due to a U.S. Supreme Court ruling that the eastern half of the state remains reservations for five tribes. If the ruling applies to all five tribes, the State would receive nearly $73 million less in income taxes and $132 million less in sales and use taxes each year (The Bond Buyer). • 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). • State ended fiscal year 2020 with $586 million budget shortfall (KSWO).

Oregon • January 7 update: 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. • On December 21, a Special Session of the Oregon Legislature will convene to address the needs of Oregonian’s in the face of the COVID-19 pandemic and statewide wildfires. Governor Brown urges the legislature to consider $800 million in relief funding and policy changes to address constituent needs (Oregon.Gov). • 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

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(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). • On November 17, Governor Brown announced that 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 next month 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). • Based on full-year 2019 financial data released by Oregon Health Authority, most hospitals in the State were in good financial shape prior to COVID-19. In 2019, the net patient revenue increased 7.3% to $13.7 billion, and operating expenses grew by only 1.2%. These gains were not distributed evenly and there is no clear trend of which kinds of hospitals performed best (e.g., urban versus rural, large versus small, large systems versus independent) (Portland Business Journal). • 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 • January 7 update: 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 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

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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 (AP News). • Governor Wolf signed a budget that funds most agencies through November and funds schools through June 30, 2021 (NASBO).

Puerto Rico • January 7 update: 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 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).

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Rhode Island • January 7 update: Governor Gina 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 is now estimating a $708.4 million deficit for fiscal year 2021 (What’s Up Newp). Governor Raimondo recently announced that the State is in need of 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, 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 new coronavirus. The federal government announced shortly after Rhode Island’s application was submitted that it has approved RI’s application for a grant to pay an extra $300 a week for unemployment benefits (Providence Journal). • The legislature is not expected to pass a fiscal 2021 budget until it has a clearer understanding regarding the possibility of federal fiscal aid. The state will enter FY 2021 authorized to spend 1/12 of fiscal 2020’s budget amount each month (NASBO).

South Carolina • January 7 update: 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 the fiscal year that started in July. 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 have cut back funding for police departments because of the revenue shortfalls as a result of the pandemic. Cities have reduced their police spending anywhere from $1 million to $3 million (The Post and Courier). • The Board of Economic Advisors in South Carolina will meet the first week of September to predict revenue estimates for FY 20-21. The Legislature is schedule for a special session to discuss the budget on September 15. Governor McMaster has suggested that state agencies prepare plans to cut budgets up to 3% (US News).

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South Dakota • 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). • The Joint Committee on Appropriations in South Dakota recently met to discuss the allocation of the remaining CARES Act dollars. South Dakota continues to push relief for small businesses. As of December 7, only 161 small businesses out of nearly 5,000 applications in South Dakota have been approved for small business grants (KOTA-TV). • South Dakota legislators will receive a pay raise of $958.41 next year, 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 last month, legislators adopted a resolution that includes recommendations for how they want Governor Noem to spend the rest of the COVID-19 funding (Keloland, Oct 5). Governor Noem already 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, Oct 5):

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. • In late August, the State has over $1.17 billion left from COVID-19 relief funds out of the $1.25 billion it received (Argus Leader).

Tennessee • January 7 update: Educators predict that the literacy rate in Tennessee will fall as a result of the ongoing pandemic. Therefore, he Tennessee Department of Education plans to spend $100

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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 has been 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 • January 7 update: 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 state fiscal year 2019 unless otherwise indicated. • The Governor is considering how to spend the remaining CARES Act funds before the December 30 deadline. The state received a total of $11.24 billion, and $3.5 billion still needs to be distributed before the funds expire. There are plans to distribute $1.45 billion to the state health

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and the emergency management departments, and the office of the governor is working with other state agencies to decide how the remaining $2 billion will be distributed (KXAN). • In preparation for the upcoming legislative session, the Legislative Budget Board held a meeting on November 30 to hear from the State Comptroller regarding available state budget funds. While state revenue has declined significantly, the Comptroller reported that sales tax declines were not as great as originally anticipated. The Comptroller declined to provide detailed information regarding actual numbers (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). • Rather than holding legislative hearings to get feedback from the public regarding interim charges, Texas legislative committees posted requests for information (RFIs) 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 that they are now 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). • Latest revenue estimates show a $4.6 billion shortfall for the current fiscal year.

o Estimate excludes 5% reductions from the agencies requested by the Governor o Current estimate does not account for the budget to be adopted by the 87th Legislature (convenes January 2021).

o As a result, the state anticipates a large supplemental appropriations bill before Texas starts its 87th biennium budget round (2022-2023). • As required by the Governor, HHSC proposed a $133 million reduction for the current budget in June (Texas Health and Human Services).

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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 • January 7 update: On January 4, Governor Spencer Cox (R) was sworn into office as Utah’s 18th governor (Salt Lake Tribune). • Utah’s ballot includes 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 proposes 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, 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 (The 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 • January 7 update: 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 the statement of legislative intent to provide for additional unemployment support, hazard pay, and health care stabilization. • In June, 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

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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 Business Magazine). • In August, Governor Scott announced that the COVID-19 State of Emergency will be extended to September 15, 2020, as well as additional local discretion for gathering size limits and liquor sales (Addendum 3 to Amended and Restated Executive Order No. 01-20, Press Release, Governor's Press Conference). • The governor signed a budget for the first quarter of FY 2021. The legislature is expected to return later in the summer to consider a full-year budget once the revenue situation and the outlook for federal aid is clearer (NASBO).

Virginia • January 7 update: 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 Ralph 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, December 16). • Governor Northam recently sent the budget back to General Assembly. 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 (Washington Post). • Two months after the special session started, Virginia lawmakers finally passed the state budget, which gives bonuses to police, pays for criminal justice reforms, and extends 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

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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). • State General Fund was down 0.2% in August from 2019, and sales and tax collections saw an increase. Payroll withholding tax collections decreased 4% in August and sales and use tax collections (which reflect July sales) increased 1.2% (Virginia Business). • Governor Northam set a special session for August 18 with one of the top priorities being to address the current state budget (3WTKR).

o As of September 14, no agreement has been reached (The Free Lance-Star). • Senate and House of Delegates plan to adopt legislation to provide $2M that Governor Northam already has included in his proposed budget to reimburse local election registrars to provide prepaid postage for voters to mail their absentee ballots for the election on November 3 (Richmond Times). • Governor Northam announced there will be no layoffs or cuts to existing programs and essential services. As of August, State has $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). • Del. Lee Carter (D-Manassas) requested an amendment to House Bill 5005, outlining Virginia's budget allocations for 2021 and 2022 and pushing for 25% cut on state police budget (Chatham Star Tribune).

Washington • Governor Inslee has 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 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 express concern that the $3.3 billion dollar shortfall through 2023 will have an overall impact on Washingtonians. 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

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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 of Washington has 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 has 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 enacts budgets on a two-year cycle, beginning July 1 of each odd-numbered year. The budget approved for the 2019-2021 biennium remains in effect from July 1, 2019 through June 30, 2021. • 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 • January 7 update: 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). • West Virginia still has 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

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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). • State revenue collections closed September $10 million higher than anticipated. Total general revenue fund collections for the month were nearly $424 million, which gives the State a $10 million surplus – estimated revenues were $413.6 million (The Center Square). • West Virginia’s revenue collections in July exceeded estimates by $44.5 million as the State delayed the income tax filing deadline to July 15 and sales tax collections topped estimates by $7.85 million. Revenue Secretary Dave Hardy said the budget year ended with a $28 million surplus, which is much better than they had projected (NASBO).

Wisconsin • 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 are down 22% from March to May. In April, 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 2021 General Session scheduled for January 12, 2021 may be delayed due to the COVID-19 pandemic. The Legislative Service Office (LSO) is working to determine when sessions will occur (Wyoming Legislature). • Following Governor Gordon’s request for $500 million in funding cuts, the Department of Health has 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 that 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

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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 providers, and reducing mental health and SUD services (Wyoming Administration & Information). • Earlier this year, 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, 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). • The Wyoming Department of Health expects 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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