Friday, December 20, 2013

Tax revenue in more than 2/3 of states has yet to reach level seen just before Great Recession

Tax revenue in more than two-thirds of the states had not recovered from the Great Recession by the first quarter of this year, with total tax collections 1.6 percent below the record set just before teh recession began, according to a study by The Pew Charitable Trusts. "For every $1 states collected at their 2008 revenue peak, they took in the equivalent of 98.4 cents in the first quarter of 2013. It means most states had less purchasing power from their tax dollars while simultaneously coping with a sharp drop in federal stimulus aid, still-high unemployment, and rising demand for costly services such as Medicaid and education."

Some states, though, have made strong recoveries, according to the study. "North Dakota’s tax revenue was 100 percent above its highest point during the recession, thanks to an oil boom that sent severance and sales taxes soaring." But in 13 states, "Tax revenue remained down 10 percent or more from their peak, in today’s dollars." Those states were Alaska, Wyoming, Arizona, New Mexico, Louisiana, Florida, Georgia, Idaho, South Carolina, Virginia, Ohio, Michigan, and New Jersey; most have large percentages of rural populations. (Read more)
(Pew graphic: Changes in tax revenue from peak quarter in 2008 to first quarter in 2013)

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