The pandemic and government stimulus has been good for states revenue. States collect revenue primarily from sales, income and real estate tax and their coffers are overflowing. State and local tax receipts are 16% above pre-pandemic levels while spending is up only 5%. The dramatic increase is a result of surging retail spending during the pandemic. State budget stabilization accounts – rainy day funds – climbed to a record $113 billion in 2021. What will the states do with all the extra cash? Some states, including California, Virginia and Washington D.C. are mailing out checks. Thirteen states have enacted laws to reduce individual or corporate income taxes. Others are planning to increase their spending. According to the National Association of State Budget Officers, state spending is projected to grow 9.3% in 2022. This is all very good news for taxpayers and state residents and will help offset the loss of some of the Federal aid that was doled out the last two years.