[Epoch Times] What a difference two years—and $5.7 trillion in federal money—makes in fostering dramatic reversals of fortune for state and local budget managers.In spring 2020, governments were confronted with cascading costs in managing the public health response to the COVID-19 outbreak, spiking unemployment, and steep revenue declines resulting from business disruption and restrictions.
Two years later, lawmakers are awash in federal funding after Congress approved five COVID-19 assistance packages, pumping at least $5.7 trillion into the economy, including $900 billion to state and local governments.
The Washington-based Committee for a Responsible Federal Budget estimates that as much as $800 billion of that $5.7 trillion remains uncommitted across a spectrum of federal, state, local, and public-private agencies, and in statehouses, county seats, and city halls.
The U.S. Department of Commerce’s Bureau of Economic Analysis reported that government revenues in the third quarter of 2021 were 23 percent above pre-pandemic levels "thanks to massive federal transfer payments from COVID relief legislation."
Other factors that boosted government revenues cited in a Jan. 28 Associated Press analysis include inflation ignited by stimulus-check spending that leavened sales tax collections, a spike in capital gains tax revenues generated by a strong stock market, federal padding of state unemployment relief, and a pandemic-induced increase in home-based employment.