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emergency.282 This approach to the growth rate provides recipients with the option to use <br />a standardized growth adjustment when calculating the counterfactual revenue trend and <br />thus minimizes administrative burden, while not disadvantaging recipients with revenue <br />growth that exceeded the national average prior to the COVID-19 public health <br />emergency by permitting these recipients to use their own revenue growth rate over the <br />preceding three years. <br />• Step 3: Identify actual revenue,283 which equals revenues collected over the twelve <br />months immediately preceding the calculation date. <br />• Step 4: The extent of the reduction in revenue is equal to counterfactual revenue less <br />actual revenue. If actual revenue exceeds counterfactual revenue, the extent of the <br />reduction in revenue is set to zero for that calculation date. <br />For illustration, consider a hypothetical recipient with base year revenue equal to 100 (Step 1) <br />that ends on June 30, 2019. In Step 2, the hypothetical recipient finds that the average annual <br />growth across all state and local government "General Revenue from Own Sources" in the most <br />recent three years of available data, 5.2 percent, is greater than the recipient's average annual <br />revenue growth in the three full fiscal years prior to the public health emergency. In this <br />illustration, n (months elapsed) and counterfactual revenue would be equal to: <br />As of: <br />12/31/2020 <br />12/31/2021 <br />12/31/2022 <br />12/31/2023 <br />n (months <br />elapsed) <br />18 <br />30 <br />42 <br />54 <br />Counterfactual <br />revenue: <br />107.9 <br />113.5 <br />119.4 <br />125.E <br />282 At the time the interim final rule was published, the average annual growth across all state and local government <br />"General Revenue from Own Sources" in the most recent three years of available data (2015-2018) was 4.1 %, which <br />was presented as one option for the growth adjustment. Since the interim final rule was published, 2019 data has <br />been made available, which increases this rate to 5.2%. The final rule updates the percentage to 5.2%, as shown in <br />Step 2. <br />283 As explained below, in the final rule, recipients must adjust actual revenue amounts based on certain tax policy <br />changes. <br />237 <br />