The nation’s unemployment rate hit 10% last year, and a long, two year global recession has threatened the financial security of families around the world.
It comes as no surprise that state governments are the next to feel the painful effects of a shaky economy; less money being earned and less money being spent across the nation has resulted in a severe drop in state income. State governments reported that tax collections decreased $67 billion in fiscal year 2009, according to a report released Tuesday by the Census Bureau. This amounts to a decrease of 8.6% from the year before.
General sales taxes were $228.1 billion, a 5.4% decrease from 2008. Tax collections on individual income were $245.9 billion, down 11.8% from the year before. And collections of corporate net income taxes were $40.3 billion, a drop of 20.7% from 2008. These taxes are the major source of operating income for states, making up 71.9% of all state government tax collections nationally.
“The 2009 state tax collection data is the first component of government finance data released each fiscal year and provides an important indicator of the fiscal condition of state governments,” said Lisa Blumerman, chief of the Census Bureau’s Governments Division.
Revenue from other types of taxes was also down across other categories.
Severance taxes – taxes that are imposed for the removal of natural resources such as oil, gas, coal, timber, and fish – were down $4.8 billion in 2009. The decrease of 26.5% from the year before followed a dramatic increase of 65.2% in 2008. The South and the West suffered the largest drops in severance tax income for 2009.
States also brought in 36% less revenue from mortgages, deeds, and securities in 2009, the result of a $2.8 billion decrease from the year before. By region, the largest decrease was in the South.
The states that have been hit hardest by the loss of revenue from individual income were Arizona, down 42.5%; South Carolina, down 29.6%; Tennessee, down 23.8%; and New Mexico, down 23.2%.
States with the largest percent decrease in revenue from corporate net income tax were Michigan, down 63.5%; Oregon, down 45.8%; New Mexico, down 42.6%; and Utah, down 37.7%.
The data represents money collected only by the states; local government revenue is not included in this report.
Source:
U.S. Census Bureau
