he CARES Act, passed on March 27, 2020, provided funding to state governments for COVID-19 relief for only the last three months of fiscal year 2020, but even so, it seems to have had a major impact on some states’ finances compared to 2019.
The U.S. Census Bureau’s Annual Survey of State Government Finances captures the effect of the CARES Act funding and offers a glimpse of its impact on government finances.
For example, as a result of the additional funding for April, May and June of 2020, eight states saw more than a 50% increase in government funding. Nine states increased health expenditures by more than 20%, three of them by more than 50%.
The typical fiscal calendar runs from July 1 to June 30. For the purposes of this story, the four states that follow a different fiscal calendar — Alabama, Michigan, New York and Texas — are excluded.
California is also excluded because the Census Bureau does not receive annual data from that state. Instead, the Census Bureau uses California’s budget documents that do not reflect this additional federal income as of the publication of this story.
Although the latest Annual Survey of State Government Finances covers only the first three months of the CARES Act (March 27-June 30, 2020), the data show the potential impact it had on government finances.