States are getting pounded by the economy, with tax collection revenues in the third quarter among the worst in years, according to a new report.
The Center on Budget and Policy Priorities noted that state revenue collection has been slowing down for at least a year, but the new figures indicate steep declines in revenue across a variety of taxes in states from all parts of the country. Of the 15 states surveyed in the report, the median state experienced a 5.5 percent decline in total tax revenue after adjusting for inflation. Only Michigan, which enacted a major tax increase, experienced revenue growth. Meanwhile, revenues in all the other states declined.
Sales tax revenue has been particularly hard hit, CBPP pointed out. Sales tax revenue fell in every one of the 15 states surveyed, with a median decline of 7.3 percent after adjusting for inflation.
Personal income tax revenues are also down sharply from previous quarters. Until recently, personal income tax revenue was growing in most states, but it has declined an average of 2 percent in the July-September period after adjusting for inflation. Each of the surveyed states except Michigan and Minnesota experienced declines.
CBPP noted that the declines in state tax revenues could have a serious impact on funding for education, health care and other state services.
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