Report: Sales Tax Collections Hit 50-Year-Lolow
As Americans tighten their belts and make fewer big purchases, state and local sales tax collections experienced their worst decline in 50 years, according to a new report released today (April 14).
Forty-one states saw declining revenues in the fourth quarter of 2008, with the Far West region suffering the most, the Nelson A. Rockefeller Institute of Government said in its latest report.
And the bad news for states doesn't end there: personal income tax collections for the same period fell 1.1 percent and corporate income tax revenue dropped by 15.5 percent. All state tax collections for the fourth quarter of 2008 showed a decline of 4 percent, the first decline in more than six years.
The fiscal outlook for this year appears worse. For the opening months of 2009, early figures show an overall revenue decline of more than 12 percent, "a further dramatic worsening of fiscal conditions nationwide," the institute said.
Donald J. Boyd, senior fellow at the Rockefeller Institute and study co-author, predicts that the budgets state lawmakers are crafting now "will have to be buttressed with additional spending cuts or tax increases as the year progresses."