On April 12th, Census Bureau released state government tax collections for fiscal 2011 which ended on June 30, 2011 for 46 states. This Data Alert examines trends in state government tax collections at the individual state level, as well as the national level. We have previously reported some analysis of fiscal 2011 tax revenue data in our quarterly State Revenue Report released on January 2012, which was based on preliminary data.
Fiscal 2011 tax collections show strong year-over-year growth compared to fiscal 2010 collections. According to Census Bureau data, in fiscal 2011 total state government tax collections increased by 8.9 percent, personal income tax by 9.8 percent, sales tax by 8.2 percent and corporate income tax by 9.4 percent. While the strong year-over-year growth rates in state tax collections are encouraging at first glance, the overall state fiscal picture is not as promising.
For this data alert, we provide some analysis of revenues for fiscal 2011 compared to their recessionary peak levels. Figure 1 below shows percent change in total, sales and personal income tax collections in for fiscal years 2009, 2010 and 2011 compared to fiscal 2008. As shown on Figure 1, personal income tax collections had the largest declines in all years relative to 2008 levels, and at the end of 2011 were still 6.8 percent below the 2008 levels. At the end of fiscal 2011, overall tax collections were still 2.1 percent below the peak tax collections levels, and sales tax collections were above by insignificant 0.3 percent.
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Figure 1: Percent Change in Tax Collections Relative to FY 2008 |
 |
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Source: Rockefeller Institute analysis of Census Bureau data. |
Table 1 shows the percent change for each state's total tax collections from its peak level to fiscal year 2011 for all states. Table 1 also shows similar data for sales and personal income taxes as well as sales and personal income taxes as shares of total taxes for each state. Table 2 provides the peak year for total taxes as well as sales and personal income taxes for each individual state. North Dakota was the only state where overall tax revenues showed continued growth, regardless of the recession.
The numbers in Table 1 indicate that overall state tax revenues still have a long way to go before they fully recover from the deep declines caused by the Great Recession. The extent of revenue recovery varies dramatically among the states. Overall, 32 states reported fiscal 2011 total-tax collections that were still below peak levels; 10 of those declines were by double-digit percentages. Only 17 states reported fiscal 2011 total taxes that were higher than previous peak levels.
Eighteen states reported sales taxes in fiscal 2011 that surpassed earlier peak revenues. Sales tax revenues were below the peak levels in 28 states, of which 7 states saw double-digit declines. Arizona reported the largest decline in sales tax collections compared to its peak level at 32.5 percent, followed by Louisiana at 19.2 percent.
Personal income tax collections have suffered the most persistent and widespread declines, despite strong growth in the last year or so. Among 43 states with personal income taxes, 38 states reported declines in personal income tax collections in fiscal 2011 compared to their peak levels, with 18 states reporting double-digit declines. Only five states have seen increases in their personal income tax collections since peak levels.
Nonetheless, fiscal 2011 was a better year for state tax revenues than fiscal 2010. The year-over-year growth rates in overall tax collections in fiscal 2011 ranged from 0.4 percent in Hawaii to 44.5 percent in North Dakota. In terms of sales tax collections, South Carolina and Virginia were the only two states reporting declines in fiscal 2011 compared to fiscal 2010 at 1.4 and 2.3 percent, respectively. All states with broad-based personal income tax collection, but Hawaii, reported growth in personal income tax collections in fiscal 2011 compared to fiscal 2010. While the growth rates in fiscal 2011 tax collections were relatively strong compared to 2010, such growth is not sustainable over time. The preliminary tax revenue data from Census Bureau for the first and second quarters of fiscal 2012 indicate a noticeable softening of tax revenue growth compared to fiscal 2011 collections.
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Table 1: Change From Peak to FY 2011 in State Tax Collections |
|
State |
Percent change from peak to 2011 |
Share of total tax |
|
Total tax |
Sales tax |
PIT |
Sales |
PIT |
|
United States |
(2.1) |
0.3 |
(6.8) |
32% |
34% |
|
Alabama |
(4.8) |
(4.9) |
(9.2) |
25% |
32% |
|
Alaska |
(36.6) |
N/A |
N/A |
N/A |
N/A |
|
Arizona |
(24.7) |
(32.5) |
(23.6) |
41% |
26% |
|
Arkansas |
2.7 |
(5.8) |
(3.2) |
35% |
29% |
|
California |
4.9 |
14.5 |
(9.4) |
30% |
41% |
|
Colorado |
(1.6) |
(6.0) |
(10.4) |
23% |
48% |
|
Connecticut |
(3.7) |
(8.3) |
(5.6) |
24% |
48% |
|
Delaware |
3.0 |
N/A |
(6.2) |
N/A |
32% |
|
Florida |
(18.9) |
(15.3) |
N/A |
59% |
N/A |
|
Georgia |
(12.3) |
(14.1) |
(13.4) |
32% |
48% |
|
Hawaii |
(5.6) |
(4.7) |
(20.1) |
51% |
26% |
|
Idaho |
(10.7) |
(11.9) |
(18.7) |
36% |
36% |
|
Illinois |
(2.1) |
(6.5) |
8.8 |
25% |
38% |
|
Indiana |
(1.4) |
1.0 |
(5.2) |
42% |
31% |
|
Iowa |
3.6 |
1.4 |
0.1 |
31% |
39% |
|
Kansas |
(4.6) |
9.8 |
(7.6) |
36% |
40% |
|
Kentucky |
1.6 |
0.7 |
(1.9) |
28% |
33% |
|
Louisiana |
(19.4) |
(19.2) |
(25.2) |
32% |
27% |
|
Maine |
(2.9) |
(4.7) |
(9.1) |
27% |
39% |
|
Maryland |
1.6 |
1.2 |
(4.3) |
24% |
42% |
|
Massachusetts |
0.1 |
20.1 |
(7.2) |
22% |
53% |
|
Michigan |
(5.0) |
17.3 |
(11.0) |
40% |
27% |
|
Minnesota |
3.4 |
2.3 |
(3.8) |
25% |
39% |
|
Mississippi |
(0.5) |
(7.1) |
(6.7) |
44% |
22% |
|
Missouri |
(7.4) |
(9.2) |
(11.4) |
29% |
45% |
|
Montana |
(6.3) |
N/A |
(6.6) |
N/A |
35% |
|
Nebraska |
(1.8) |
(9.7) |
(0.3) |
33% |
41% |
|
Nevada |
0.4 |
(8.8) |
N/A |
46% |
N/A |
|
New Hampshire |
3.1 |
N/A |
(29.2) |
N/A |
4% |
|
New Jersey |
(11.2) |
(8.6) |
(15.8) |
30% |
39% |
|
New Mexico |
(9.9) |
(2.9) |
(11.0) |
38% |
21% |
|
New York |
4.1 |
2.5 |
(1.7) |
17% |
53% |
|
North Carolina |
(1.8) |
17.4 |
(10.2) |
28% |
44% |
|
North Dakota /1 |
65.3 |
27.9 |
17.0 |
20% |
11% |
|
Ohio |
(3.4) |
(1.2) |
(10.4) |
31% |
35% |
|
Oklahoma |
(6.8) |
0.7 |
(14.4) |
28% |
31% |
|
Oregon |
4.8 |
N/A |
(1.8) |
N/A |
68% |
|
Pennsylvania |
0.7 |
0.9 |
(5.5) |
28% |
30% |
|
Rhode Island |
(1.0) |
(5.8) |
(6.9) |
30% |
37% |
|
South Carolina |
(11.5) |
(13.6) |
(12.6) |
36% |
38% |
|
South Dakota |
2.8 |
6.8 |
N/A |
59% |
N/A |
|
Tennessee |
(5.9) |
(9.5) |
(34.9) |
57% |
2% |
|
Texas |
(5.2) |
0.8 |
N/A |
50% |
N/A |
|
Utah |
(10.4) |
(6.1) |
(11.4) |
34% |
42% |
|
Vermont |
4.9 |
(3.9) |
(10.8) |
12% |
21% |
|
Virginia |
(6.7) |
(4.8) |
(6.9) |
20% |
55% |
|
Washington |
(3.1) |
(6.7) |
N/A |
61% |
N/A |
|
West Virginia |
5.3 |
7.1 |
7.0 |
24% |
32% |
|
Wisconsin |
2.9 |
(3.7) |
1.5 |
27% |
42% |
|
Wyoming |
(10.9) |
(12.8) |
N/A |
35% |
N/A |
|
Source: Rockefeller Institute analysis of Census Bureau data.
N/A = not applicable.
/1 Tax revenues showed continuous growth; the 65.3% is relative to FY 2008. |
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Table 2: Peak Years for State Tax Collections |
|
State |
Total Taxes |
Sales |
PIT |
|
Alabama |
2008 |
2008 |
2008 |
|
Alaska |
2008 |
N/A |
N/A |
|
Arizona |
2007 |
2007 |
2007 |
|
Arkansas |
2008 |
2007 |
2008 |
|
California |
2008 |
2007 |
2008 |
|
Colorado |
2008 |
2008 |
2008 |
|
Connecticut |
2008 |
2008 |
2008 |
|
Delaware |
2008 |
N/A |
2007 |
|
Florida |
2006 |
2007 |
N/A |
|
Georgia |
2007 |
2007 |
2007 |
|
Hawaii |
2008 |
2008 |
2008 |
|
Idaho |
2008 |
2008 |
2008 |
|
Illinois |
2007 |
2008 |
2008 |
|
Indiana |
2008 |
2009 |
2008 |
|
Iowa |
2009 |
2009 |
2008 |
|
Kansas |
2008 |
2008 |
2008 |
|
Kentucky |
2008 |
2008 |
2008 |
|
Louisiana |
2008 |
2007 |
2007 |
|
Maine |
2008 |
2008 |
2008 |
|
Maryland |
2008 |
2009 |
2008 |
|
Massachusetts |
2008 |
2008 |
2008 |
|
Michigan |
2008 |
2006 |
2008 |
|
Minnesota |
2008 |
2008 |
2008 |
|
Mississippi |
2008 |
2007 |
2008 |
|
Missouri |
2008 |
2007 |
2008 |
|
Montana |
2008 |
N/A |
2008 |
|
Nebraska |
2008 |
2008 |
2008 |
|
Nevada |
2007 |
2007 |
N/A |
|
New Hampshire |
2008 |
N/A |
2008 |
|
New Jersey |
2008 |
2008 |
2008 |
|
New Mexico |
2007 |
2007 |
2008 |
|
New York |
2008 |
2008 |
2009 |
|
North Carolina |
2008 |
2008 |
2008 |
|
North Dakota /1 |
2011 |
2009 |
2009 |
|
Ohio |
2008 |
2008 |
2008 |
|
Oklahoma |
2008 |
2009 |
2008 |
|
Oregon |
2007 |
N/A |
2007 |
|
Pennsylvania |
2008 |
2008 |
2008 |
|
Rhode Island |
2007 |
2007 |
2008 |
|
South Carolina |
2007 |
2007 |
2008 |
|
South Dakota |
2009 |
2009 |
N/A |
|
Tennessee |
2008 |
2008 |
2008 |
|
Texas |
2008 |
2008 |
N/A |
|
Utah |
2008 |
2008 |
2008 |
|
Vermont |
2007 |
2008 |
2008 |
|
Virginia |
2007 |
2007 |
2007 |
|
Washington |
2008 |
2008 |
N/A |
|
West Virginia |
2008 |
2007 |
2009 |
|
Wisconsin |
2008 |
2008 |
2008 |
|
Wyoming |
2009 |
2009 |
N/A |
|
Source: Rockefeller Institute analysis of Census Bureau data.
1/ Tax revenues showed continuous growth. |
