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Budgetary Issues Nationwide
By Wisconsin School Administrators Alliance staff | April 30, 2020
From The Wheeler Report . . .
According to a report released by the Center on Budget and Policy Priorities, state budget shortfalls from the pandemic could total $650 billion over three years. The estimate is based on economic projections from the Congressional Budget Office (CBO) and new updated projections released by Goldman Sachs. The Center’s early estimates show state shortfalls will reach about 10% in the current fiscal year, which ends on June 30 for most states), and as high as 25% in FY2021.
The CBO projections state that unemployment will average 15% for the second and third quarters of 2020. The 15% in the second and third quarters of 2020 results from a projected loss of nearly 27 million unemployed and the exit of 8 million people from the labor force.
While the unemployment rate, defined as the number of jobless people who are available for and seeking work, is expected to remain high, the labor participation rate is expected to decrease. The labor participation rate is the “percentage of people in the civilian noninstitutionalized population who are at least 16 years old and who are either working or seeking work.” The CBO projects the labor participated rate will decline from 64.2% in the first quarter to 59.85 in the third quarter.
The CBO projects the labor market will improve after the third quarter, “with a rebound in hiring and a significant reduction in furloughs as the degree of social distancing diminishes.” The CBO says the unemployment rate is projected to decline from the 15% to 9.5% by the end of 2021.
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