State Budgets and COVID-19

Homeownership is the largest source of wealth for most American families, and obtaining a safe, traditional 15-to-30-year mortgage is a key step toward achieving financial security. But outdated housing policies and financial regulations have made small mortgages—those for homes priced under $150,000—expensive for lenders and unavailable for millions of qualified and creditworthy borrowers, especially Black, Hispanic, and Indigenous households and those in rural communities. With limited access to small mortgages, many of these families turn to alternative financing arrangements, which often involve financial risks and lack many of the protections traditional mortgages offer.

Stat: $75 billion: The total amount of money that states had set aside in rainy day funds at the end of 2019 in case of an economic downturn.

Story: The short-term effects of the coronavirus pandemic on our health care systems and daily lives were immediately clear. But how will states weather the economic storm over the long term? In this episode, we hear from Josh Goodman of Pew’s state fiscal health team, who shares insights on the steps that states are taking to address looming budget shortfalls.

Related resources:

• Four Steps to Reduce the Harm of State Fiscal Distress
• Budget Stress Testing Helps States Prepare for Fiscal Distress
• Rainy Day Funds Help States Weather Fiscal Downturns
• States Need Budget Flexibility to Weather Tough Times
• When Will the Impact of Coronavirus Hit State Budgets?
• Coronavirus Outbreak Reinforces Need for Long-Term State Budgeting