State and Local Governments Forced to Do More with Less

According to the most recent data published by the U.S Census Bureau, state and local government sector operating expenditures represented 15% of all economic activity in the United States in 2017 - measured by Gross Domestic Product (GDP) - making it an influential sector for the economy. However, the COVID-19 pandemic is causing state and local governments to spend more while taking in less revenue. As residents lose jobs, states must allocate more revenue to unemployment insurance. Some of these newly unemployed residents also qualify for Medicaid benefits, requiring states to allocate even more revenue to public healthcare.

Read the August 2020 Market Commentary