You may have missed this Bloomberg report yesterday:

“The two-year slide in tax collections that opened a $196 billion gap in U.S. state budgets has stopped, easing pressure on credit ratings and giving leeway to lawmakers as they craft spending plans for next year.

The 15 largest states by population forecast a 3.9 percent gain in tax revenue in fiscal 2011, budget documents show. The 50 states on average may increase collections by about 3.5 percent, the first time in two years the figure is expected to grow, said Mark Zandi, chief economist at Moody’s Economy.com,

California took in 3.9 percent more since December than projected in January, Controller John Chiang said this month. New York got $129 million above forecasts in its budget year through February, according to a report from Comptroller Thomas DiNapoli. In New Jersey, the second-wealthiest state per capita, January sales-tax collections were 1.9 percent higher than a year earlier, the first annual increase in 19 months, forecasters said in a report last month.”

This is yet another sign of a gradual, modest recovery taking hold:

Revenue Decline Leveling Off:
15 Largest States by Population

State          FY 08     FY 09     FY 10     FY 11*    Change
               Revenue   Revenue   Revenue   Revenue   FY 10-11

California     $103.0    $82.8     $88.1     $89.3      +1 %
Texas(1)         41.4     37.9      37.3      40.4      +8 %
New York (2)     60.9     60.3      58.8      62.2      +6 %
Florida          24.1     21.0      21.0      22.4      +6 %
Illinois(3)      24.8     22.6      21.6      21.4      -1 %
Pennsylvania(3)  27.9     25.3      27        26.2      -3 %
Ohio             22.1     20.9      19.0      19.1      +1 %
Michigan(4)      20.9     18.3      17.4      17.8      +6 %
Georgia          17.7     15.8      14.7      15.4      +5 %
North Carolina   19.6     17.4      17.3      20.6(5)   +6 %
New Jersey       32.6     28.9      27.7      28.3      +2 %
Virginia         15.6     14.3      13.9      14.4      +3 %
Washington       15.7     14.1      13.8      15.0      +8 %
Arizona           8.8      7.7       7.0       7.3      +4 %
Massachusetts    23.2     20.6      21.3      22.0      +3 %

>

Source:
Tax Receipts Rebound as 15 Biggest States See Gain
Dunstan McNichol
Bloomberg, March 30 2010

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKBVswcpwXBE

Category: Economy, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “State Tax Receipts Rebound”

  1. franklin411 says:

    I thought this was an interesting tidbit too:

    For the first time since records have been kept (1948), more vehicles were scrapped than purchased (14.8 million scrapped v 13.6 million purchased) over the last 15 months.

    IIRC correctly, Cash for clunkers sold about 765k vehicles, so clearly one can’t claim that Clunkers explains it. Those crushed vehicles will have to be replaced sooner or later.

    http://articles.latimes.com/2010/mar/31/business/la-fi-scrap31-2010mar31

  2. Mike in Nola says:

    Sounds like reports of the house market rebound: a few up months from a very low level and eveything’s hunky dory.

    F411: will they have to be replaced? We may be past the era of the 3 and 4 car household.

  3. arbitrader says:

    “The 15 largest states by population forecast a 3.9 percent gain in tax revenue in fiscal 2011″

    huh?

    A FORCAST for the next fiscal year is important? Is there reason to believe the forcast doesn’t already presume recovery?

  4. dss says:

    @Mike in Nola,

    Permanently unemployed people don’t need a car.

  5. jonathanb says:

    BR – If you missed El-Erian on CNBC you must watch it:

    http://www.msnbc.msn.com/id/32450072/vp/36148485#36148225

    I’m honestly embarrassed for these fools. They seem so upset that El-Erian won’t do cart wheels with them. I’d give anything to know what is going through El-Erian’s head during this interview. Anyone want to venture a guess?

  6. torrie-amos says:

    a guy over at minyanville had an article, his theory was that the savings rate going from 5% at the peak too 3% is equivalent dollar wise too 200k jobs, so if it stays there or trends lower thats equivalent too 200k jobs per month added to whatever gets printed

    not checked his facts yet the theory makes sense the ones who have a job are more confident and spend more

    also same guy explained george soros “reflexivity theory”, which i’d heard the word often and there was theory on it yet neve knew particulars, he said basically that major index prices effect mass physchology of all, so higher stock prices make not only business leaders feel better but workers, politicians etc……………………… that also makes sense

  7. franklin411 says:

    @Mike
    The average age of the US car fleet is 10.2 years. Out of all my friends, male and female, I know of only one besides myself who knows which end of a wrench goes where. Those old cars are going to break eventually and people aren’t going to fix them because Americans are wusses these days.

    So yes, they will be replaced. :)

    http://www.freep.com/article/20100331/BUSINESS01/3310356/1318/Car-sales-growth-expected

  8. bear_in_mind says:

    I would urge a critical review of any such proclamations coming from California. What Controller John Chiang failed to mention was the most recent budget voodoo included the accelerated collection of business and payroll taxes. Yet another bit of chicanery to allow politicians to claim “GREEN SHOOTS!!!!” while essentially doing nothing to address structural imbalances.

    If you have a look at the CA Controller’s “Personal Income Tax: Daily Revenue Tracker”, you’ll notice California is already running $1,015,760,000 behind this time last year. 12.5 percent ‘official’ state unemployment, plus legions of underemployed, tends to put a serious crimp into personal income tax receipts.

    Have a look for yourself:
    http://www.sco.ca.gov/april_2010_revenue_tracker.html

    @Franklin411: I think we’re experiencing a ‘relief’ fit of spending right now, where people have come out of their caves and hoping that that since they can’t see the black hole, that it really doesn’t exist. This too shall pass.

    If you’re contemplating walking away or foreclosure, you might try to land a new car because your credit is about to become a biohazard. But trust me, if you don’t have a job, you’re NOT buying a new car. If you may be facing layoffs or furloughs, you’re NOT buying a new car.

  9. dead hobo says:

    BR noted:

    The 15 largest states by population forecast a 3.9 percent gain in tax revenue in fiscal 2011, budget documents show.

    reply:
    ————
    Thank you for noticing that the abyss is forecast to have a bottom lines with rubber. This means that states might be hiring in 12 months. Do you have anything a little more current?

  10. easystreet says:

    part of the rebound in the numbers is from the wealthy cleaning up on all the great deals to be had, plus so many others have quit paying on their mortgages so there’s plenty of dough to burn through

  11. rktbrkr says:

    That headline is really misleading (what else is new?) “state tax receipts rebound”.Revenue decline leveling off is the truth of the matter.

    I thought the most interesting part about these stats was that the CA receipts declined as much as the next 10 largest states combined. And NY had only a negligible decline from 08 to 09 (Wall Street defied gravity thanks to Gentle Ben’s helicopter drops). How can NYS be in a crisis with only flat revenues?

    A lot of these states, definitely the big states, have systemic financial problems that will require drastic actions. The unemployment rate will be kept up by continuing layoffs & furloughs. Think of the furloughs as temporary hiring in reverse. Illinois is talking about a 4 day school week to save on utilities and cleaning, presumably the teachers and admin people will be getting 5 days pay for 4 days work. I don’t think the taxpayers are in the mood for a 5 for 4 scheme like this.

  12. chromex says:

    I have no personal knowledge of other states but I am close to the Michigan situation. No “forecast” in the past 7 years here in Michigan has been close to accurate and guess which way ? The problem is the pressure on the forecasters to come up with increases so those who are pressuring them can use the “increases” -none of which manifest after the forecast is made- for political gain of some kind. Caveat Emptor on this one.

  13. ella says:

    WOW, aside from 2008/09, the tax revenues ARE PROJECTIONS. I will wait for the actual collections before I decide if the revenues are up or down year over year.

  14. mbelardes says:

    Please do not show this to our Politicians out here in California. They see “$88 Billion” and they will spend $110 billion.

    I wish I was joking.

  15. bear_in_mind says:

    April 6 update:

    From the CA Controller’s Office: “The Governor’s latest budget estimate projected personal income tax receipts would total $10.2 billion in April.” Talk about rosy projections!!!

    The Controller would have to collect an average of $463.6 million/day for the entire month to reach $10.2 billion. Given the Controller has taken in a meager $303 million thus far, it looks like the governor’s projections were sheer fantasy.

    Average April 2010 receipts are $101 million/day (vs. $142 million/day this time last year). Note, these number includes California requiring all employers to withhold 10 percent more in state income taxes effective Nov. 1, 2009!

    So, it’s looking like another $7-$8 billion crater to the tattered CA budget.

  16. advocatusdiaboli says:

    I am skeptical. My wife works in local municipal government in NorCal and is privy to “the rest of the story”. As some have surmised, the state (and municipal as well) governments are pulling in revenue to help backfill their shortfalls . Most of them including Cal State are all still predicting increasing deficits through 2011 and some even beyond.