Watchdog Warns States Blowing ‘Budget Surpluses’ on Wants Not Needs

Says money should be spent paying down their debt levels rather than handing out tax breaks

California's Gov. Gavin Newsom speaks about his 2021–2022 state budget proposal during a news conference in Sacramento, Calif., on Jan. 8, 2021. Rich Pedroncelli/AP Photo

In spring 2020, state and local governments were confronted with cascading costs in managing the public health response to the pandemic, spiking unemployment, and steep sales tax and user fee revenue declines resulting from business disruption and restrictions.

The situation appeared dire.