The Office of Financial Management estimates that about 70 percent of the 2019–21 budget is protected from cuts. If that is the case, then any budget cuts to offset the revenue effects of the COVID-19-related downturn would need to come out of the remaining 30 percent of the budget. However, these figures are essentially a political construct—the 70 percent estimate includes items that could be cut, though it may be difficult to do so for various reasons.

Indeed, the discretionary parts of the budget did bear the brunt of the Great Recession spending reductions. But even if the state is required to provide certain services, it is not the case that it must always spend the same amount on those services. More efficient delivery methods could be found for many programs, and such changes could reduce the share of the budget devoted to “required” costs, reducing the pressure on the other parts of the budget.

Read the policy brief here.