WASHINGTON — State and local tax revenues rose 1.5% in the first quarter of 2012 to $325.3 billion, marking the 10th consecutive quarter-over-quarter increase, the Census Bureau said Tuesday.
Total revenues rose to $4.7 billion over the first quarter of 2011, the report said. More than 80% of the increase came from stronger general sales tax revenues, while higher income tax receipts provided the remaining gains, said Gregory Daco, principal U.S. economist with IHS Global Insight.
State and local property tax collections of $114.6 billion were flat year-over-year after two quarters of gains, the report said.
Local governments collected $110.7 billion in property taxes, a decrease of 0.9% from the same quarter in 2011, the Census Bureau said.
General sales taxes rose 5.6% year-over-year or $3.8 billion for a total of $71.1 billion. Individual taxes jumped 1.4% year-over-year or $1 billion.
State tax revenue was $189.8 billion in the first quarter of 2012, up 4.5% from the $181.7 billion reported in the first quarter of 2011, according to the Census Bureau.
State and municipalities continue to slowly recover from the Great Recession. States face a $54 billion budget shortfalls for fiscal year 2013, down from $107 billion from fiscal year 2012, according to the Center on Budget and Policy Priorities.
“State and local finances are improving as the private sector continues its slow recovery and tax receipts increase,” Daco said. “However, state and local governments are not out of the woods yet.”
Daco noted that total tax revenues excluding property taxes are still 0.3% below their 2008 peak, which ultimately leads to tighter budgets for state and local governments.
High-demand for public services, slowly improving revenues and expiring federal assistance will force states to make difficult budget decisions, he said.
The Census Bureau quarterly summary is comprised of three components: local government property tax data collection, local non-property tax data collection from local government tax imposers and state government tax data collection.