Even as state tax collections saw robust growth during the past three quarters, preliminary figures for the third quarter of 2013 indicate that many states are seeing significantly slowing revenue growth, according to the Rockefeller Institute of Government.
In the second quarter of 2013, state tax revenues were up 9% compared to the same period in 2012, according to the latest State Revenue Report from the Institute. The Far West saw the largest total tax revenue gains in the second quarter, at 14.9%, but this was mostly attributable to a single state - California - where collections rose 21.2%.
At the end of fiscal 2013, inflation-adjusted tax collections for the first time surpassed the peak level reported in fiscal 2008 by 0.7%. However, the Institute said this was the result of a tax anomaly.
“Most of the growth in fiscal 2013 was because of artificially boosted personal income tax collections. In fact, inflation-adjusted sales tax collections in fiscal 2013 were still 2.9% below the recessionary peak levels reported in fiscal 2008,” the Institute said in a press release. “Moreover, inflation-adjusted figures indicate that 28 states still had lower tax receipts at the end of fiscal 2013 compared to fiscal 2008.”
Preliminary figures for July through September from 47 early reporting states indicate overall collections showed growth of 6.1% in the third quarter of 2013 compared to the same quarter of 2012. According to the preliminary data, personal income tax collections grew by 5.3% while sales tax collections by 5.6%, according to the Institute.
