Pandemic translates into budget surplus for California and some other states

Millions of Americans spent the last year out of work, and California alone has processed more than 20 million unemployment insurance claims since last March. Usually when a state is dealing with such high unemployment, it has to make major budget cuts because spending and tax revenues fall.

But new data from the Urban-Brookings Tax Policy Center suggests that California’s tax revenue last year went up by more than a percentage point. That sounds small, but it translates to a projected $15 billion budget surplus. Many states saw an increase in tax revenue last year too.