State Tax Revenues at Record Low
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From The New York Times, State Tax Revenues at Record Low, Rockefeller Institute Finds:
The anemic economy decimated state tax collections during the first three months of the year, according to a report released Friday by the Rockefeller Institute of Government. It was the steepest drop in revenues in the 46 years that quarterly data has been available.
“Green shoots” are non-existent for states struggling to stay afloat. Many of those “safe” government jobs are about to be lost along with those backloaded pension plans.
As bad as the first quarter was, the second quarter is shaping up to be even worse, the report said. Preliminary data for the first two months of the quarter, April and May, collected from 45 states, indicated that tax revenues declined by 20 percent compared with the same period last year.
That will force states — many of which are already raising taxes or fees, resorting to layoffs or furloughing employees — to come up with more ways to raise or save money. “The continuing sharp decline in revenues will likely force more unwanted choices for states in the months ahead,” wrote the report’s authors, Donald J. Boyd and Lucy Dadayan.
Raising taxes in the middle of the sharpest downturn in decades sure doesn’t seem like a formula for economic growth. The state funding disaster will unfold in California first, then the rest of the country.
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