Both Public and Private Sectors Bleeding Money, According to Reports

By:
Chris Gaetano
Published Date:
Oct 14, 2020
The pandemic economy is a harsh one, both for corporations and state governments.

Bloomberg has reported the number of large public companies that have lost money recently: 43 of the 345 companies with market valuations above $25 billion have posted cumulative losses over the past 12 months, more than three times the number of such companies at the start of the year. The analysis indicates that, despite soaring stocks, many firms continue to struggle as the coronavirus hammers the economy. The damage outdoes even that of the Great Recession, which saw only four such companies report 12-month losses at the start of 2009. The current numbers are expected to shrink over the next year, though, with Bloomberg projecting that only 10 giant companies will see similar losses in this time span.

In the public sector, recent data from 44 states shows that state governments have seen a loss of $31 billion in tax revenue from March through August, roughly 6.4 percent, compared to the same period last year, according to data from the Urban Institute. Only eight states—Alabama, Colorado, Georgia, Idaho, Nebraska, South Dakota, Vermont, and Washington—actually saw growth. The report warned that revenue declines could be even steeper in the months ahead, given the lack of a new stimulus package that would boost state income tax revenue (in the jurisdictions that tax unemployment benefits). Sales tax revenue, given the state of the economy, was also projected to remain depressed.

Click here to see more of the latest news from the NYSSCPA.