Tax Revenues Grew in Most States Ahead of COVID-19 Pandemic
Overall state tax revenues rose in the third and fourth quarters of 2019, which could help offset budget shortfalls caused by the COVID-19 pandemic, according to research from the Pew Charitable Trusts.
The organization's April 28 data analysis is based on fiscal data from the Urban Institute, which includes adjustments and corrections to the U.S. Census Bureau’s quarterly summary of state and local tax revenue.
According to Pew, “total state tax revenue at the end of the third quarter of 2019 was at its highest level since just before falling during the 2007–09 recession.”
“Collections were 17.1 percent above their 2008 peak, just before revenue plunged, after adjusting for inflation and averaging across four quarters to smooth seasonal fluctuations,” the analysis said.
However, third-quarter collections declined in five states — Alaska, Georgia, Kentucky, New Hampshire, and North Dakota — according to the analysis.
Experts are expecting most states to have budget shortfalls for this fiscal year and the next because of increased spending and declines in tax revenues caused by the pandemic.
The National Governors Association has called on Congress to provide $500 billion in federal aid to help states stabilize budgets amid the ongoing public health crisis.