Policymakers in at least 14 states are using temporary budget surpluses to call for costly and permanent tax cuts targeted more to wealthy people and profitable corporations than to those who need help. That’s a bad choice. States should be careful to protect their long-term ability to provide funding for high-quality schools, access to affordable health care, and other public services, which these tax cuts would badly erode. Instead of permanent tax cuts, states should use the surpluses for needed one-time supports for people and businesses or to seed longer-term investments, especially those targeted to the communities most harmed by the COVID-19 pandemic.

The surpluses largely reflect substantial — but temporary — federal funding provided in relief bills enacted in 2020 and 2021; those relief bills also boosted state economies and thus state revenues as well, further improving state fiscal conditions.

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