Tax Collections Rise for First Time Since '08
State and local tax revenues rose last quarter for the first time in five quarters, according to new data from the U.S. Census Bureau. That means state money managers could be getting some much-needed breathing room — a conclusion supported by a separate Bloomberg News account showing that the 15 most populous states are predicting a 3.9-percent increase in their tax revenues in the coming fiscal year.
The revenue increases reported by the Census Bureau on Tuesday (March 30) were driven by property and corporate income tax collections, which rose 5.8 percent and 3.4 percent, respectively, in the last three months of 2009, compared with the same period a year ago. The other two primary sources of state and local revenue, individual income and sales tax collections, declined by 4.7 percent and 2.8 percent, respectively.
For state-by-state information on tax revenues from the fourth quarter of 2009, click here .
Meanwhile, Bloomberg News reported Tuesday that "the two-year slide in tax collections that opened a $196 billion gap in U.S. state budgets has stopped, easing pressure on credit ratings and giving leeway to lawmakers as they craft spending plans for next year."
Mark Zandi, chief economist for Moody's Economy.com, told Bloomberg that state tax collections could increase by 3.5 percent in fiscal 2011, which begins in July in all but four states. For the most populous 15 states, that figure is 3.9 percent, Bloomberg reported, noting that California, New York, New Jersey and other large states already are seeing increases in key tax collections.
"This time last year, we were sliding down a mountain," David Rosen, chief budget officer for the New Jersey Legislature, told the news service. "I don't think we are now; it's stabilized."