WASHINGTON Aug 14 Revenues for most U.S. states
continued to fall in the second quarter, with 36 states
reporting an overall decline of 0.8 percent from the same period
in 2013, according to a report released on Thursday.
The Nelson A. Rockefeller Institute of Government, a public
policy research unit of the State University of New York, which
closely monitors state budgets, said that in the first quarter
of this year, total state tax collections posted a decline of
0.3 percent - the first drop recorded in four years.
In the second quarter, the contraction persisted due to a
6.5 percent drop in the largest revenue category for states,
personal income taxes. The quarter includes April, a key month
for personal income taxes due to the federal filing deadline.
Due to a change in the federal tax code, states saw a surge
in revenue in 2013. Taxpayers sold off investments, paid bonuses
and made other financial moves in the final hours of 2012 as the
so-called Bush tax cuts expired.
This created a bulge of taxable income in April 2013 with
total state revenue surpassing its pre-recession peak when
adjusted for inflation that year.
But in 2014, the states have had to deal with a lingering
hangover. Many prepared for a revenue drop this April, but were
surprised by its magnitude.
Sales tax collections, meanwhile, likely grew 4.5 percent in
the second quarter from a year earlier.
The U.S. Census has reported that total state tax revenue
was $206.8 billion in the first quarter, down 0.3 percent from
the same quarter of 2013, and individual income tax collections
fell 1.4 percent to $72.6 billion. Nonetheless, income taxes
were much higher than sales tax collections, following a trend
that began in 2011, the Census said.
(Reporting by Lisa Lambert, editing by G Crosse)