– Overall state tax revenues fell by 3.6 percent in the fourth quarter of 2008, compared to the same quarter a year earlier. The decline was widespread, with three-quarters of reporting states reporting collections turning downward.
– Weaker sales tax revenue represented the bulk of the decline, with a 5.9 percent year-over-year decrease. Personal income tax collections fell more modestly, by 0.4 percent, while corporate tax collections dropped 9.3 percent. This is the first time since 2002 that revenues from all three major sources declined.
– States will very likely face deeper revenue shortfalls as the fiscal year progresses, based on recent economic developments and very early data for 2009.