Researchers indicate that 27 state governments are struggling financially, primarily due to debts tied to public pension systems for government employees. The influx of $800 billion in federal pandemic aid masked these long-standing issues, but as this support fades, even fiscally strong states are compelled to reevaluate their budgets. This could lead to tax increases or reductions in essential public services such as education and transportation. The report includes chapters on revenue fluctuations, pension challenges, emerging financial risks, and stress tests facing states as they navigate these fiscal constraints.
