WASHINGTON Feb 5 Revenue growth for U.S. states
in the third quarter of 2012 was likely slower than the U.S.
Census reported and softer than in previous quarters, the
Rockefeller Institute of Government said on Tuesday.
Overall state tax revenues increased 2.7 percent from the
same quarter in 2011, Rockefeller said, slightly below the 2.9
percent the U.S. Census Bureau estimated in December. Income
taxes grew 5 percent and sales taxes 2.7 percent, while
corporate income tax rose 2.8 percent.
"Despite increases over eleven quarters - nearly three years
of continual gains - overall tax collections are still
comparatively weak by recent historical standards," Rockefeller
said in a special report.
As taxpayers bit their nails over the possibility that the
so-called "fiscal cliff" would bring about massive federal tax
increases in 2013, they sold investments and took other steps to
shift the bulk of all their tax liabilities into 2012. That
means the fourth quarter likely showed an increase in state and
local revenues, Rockefeller said.
The New York-based research group found that 11 states
registered revenue declines during the third quarter of 2012
while four had increases in the double digits. States in the
southwestern and Rocky Mountain regions showed some of the
largest gains, with New Mexico's revenues rising 14.9 percent,
Texas' up 11 percent and Colorado's gaining 8 percent.
The 2007-09 recession caused states' revenues to plummet to
lows not seen in decades over the course of five quarters. That
forced almost all states to make emergency spending cuts, raise
taxes, borrow and turn to the federal government for help just
as the newly jobless and homeless increased demand for their
States are eager for their revenues to return to the peaks
they reached before the recession, and, in total, tax revenues
are now above those highs. Still, Rockefeller noted that at the
end of fiscal 2012, 22 states had tax collections below peak
levels. For most states fiscal 2012 ended in June.
Meanwhile, local governments continue to suffer from low
revenues that are only slowly improving.
"Local tax collections have been relatively weak by
historical standards over the last three years due in part to
the lagged impact of falling housing prices on property tax
collections," Rockefeller said, noting the impact of property
assessments, which are slow to change.
The institute found that for the last four quarters, local
taxes averaged year-on-year growth of 2.6 percent, compared with
the 4.6 percent decline the previous year.