States reported robust revenue growth in the third quarter of 2020, a reversal of steep declines in the second quarter that mostly reflects shifting income tax filing deadlines. Over a six-month period (April through September 2020), state revenues declined 2.0 percent compared to the same period one year earlier.

States continue to face fiscal uncertainties because of the pandemic and its economic consequences. Although states will benefit from more plentiful vaccines, declining caseloads, and enhanced federal government support, a recovery will still take time, and economic activity could look different in a post-pandemic world.