States May Not See Revenue Recover Until Late 2021, Moody’s Says

Many U.S. states won’t see a recovery in tax revenue until late 2021 and may face “tough decisions” absent another round of federal aid, according to Moody’s Investors Service.

The ratings company said it expects tax collections for fiscal year 2021, which typically ends in June 30, to fall as much as another 5% before improving during the rest of the calendar year. Moody’s said it has a negative outlook on states, which is reflective of its view on credit conditions for the next year to 18 months.