Making Budget Decisions in the Shadow of the COVID-19 Pandemic: The Massachusetts Case

Aaron Smith-Walter and Douglas Snow

Municipal Finance Journal, 2020, vol. 41, issue 2, 61 - 73

Abstract: This article explores the impact of COVID-19 on the public budgeting and financing options for the Commonwealth of Massachusetts. The article lays out the current strengths and vulnerabilities of the economy, describes revenue losses and their impact in FY 2020 and FY 2021, and discusses the major approaches available to decision makers to resolving budget gaps. It concludes by presenting an outlook for FY 2021, which suggests that Massachusetts does have options for short-term mitigation of tax revenue losses. Although the menu of options is varied and includes borrowing, spending reductions, revenue enhancement, and drawing from the rainy day fund, the infusion of additional federal dollars is likely to be required if the worst budgetary impacts are to be avoided.

Date: 2020
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