Tax Revenue Has Recovered in 31 States, Despite Flat Q3

Source: Barb Rosewicz and Daniel Newman, Pew Charitable Trusts, May 17, 2017

Growth in total state tax revenue stalled in the third quarter of 2016, extending a rare drop in tax collections outside of a recession. Even so, more than seven years after the end of the Great Recession, receipts nationally and in 31 states have risen enough to recover from losses in the downturn, after accounting for inflation.

State tax revenue growth was flat even as the national economy continued to expand. In both the second and third quarters of 2016, collections nationally were 5.8 percent higher than they were before plunging in the first year of the recession, after adjusting for inflation and averaging across four quarters to smooth seasonal fluctuations. But that was down from a post-recession high of 6.9 percent in the first quarter of 2016.

The results mean that the 50 states combined had the equivalent of 5.8 cents more in purchasing power for every $1 they collected at their peak before receipts fell in 2008. But results varied widely from state to state…..