State Revenues Grow Despite Deep Tax Cuts

By: - October 11, 2000 12:00 am

State tax revenues rose 5 percent from 1998 to 1999, another bit of statistical evidence of the degree to which states have benefited from the nation’s economic prosperity, the Census Bureau reports.

A nonprofit nonpartisan group that tracks state revenue trends, Rockefeller Institute’s Fiscal Studies Program , puts the increase for state tax revenues even higher, at 5.7 percent, for 1999. The figure would have reached 7.4 percent had it not been for legislative tax cutting, says Rockefeller senior policy analyst Elizabeth Davis.

States cut taxes by .3 billion in 1999, up from .1.billion in 1998, .6 billion in 1997 and billion in 1996, National Conference of State Legislatures (NCSL) statistics show.

According to the Census Bureau, overall tax collections rose from billion in 1998, to billion in 1999. The states with the largest increases in revenue were Arkansas (12 percent), Nevada, Michigan and Virginia (9 percent) and Arizona (8 percent).

Six states missed out on the tax revenue bonanza and suffered revenue declines for fiscal year 1999, according to Census Bureau data. Those states were Alaska (31 percent, due to a slump in oil prices that has since turned around), Wyoming (5 percent), New Mexico (3 percent), Kansas (2 percent) and Louisiana and Hawaii (both less than 1 percent).

“In general, states tended to do better than they had forecast in fiscal 99,” Davis says. “Places that were weak tended to be states that depended on oil and states that had exports of grain” to countries affected by the Asian economic crisis. (To examine the tax picture for all 50 states, click here .)

Among the states that relied primarily upon individual income tax and general sales taxes in 1999, Hawaii derived 79 percent of its revenue from those sources, a higher percentage than any other state, the Census Bureau reports. Georgia was next at 78 percent, followed by Utah (76 percent) and Nebraska (75 percent.)

Nationwide, states collected ,835 in per capita taxes for every man, woman and child. Connecticut recorded the highest level of per capita collections, ,932, with Delaware coming in second at ,695. Rounding out the Top 5 were Hawaii (,671), Minnesota (,614) and Massachusetts (,386).

On the lower end of the per-capita scale were New Hampshire (), South Dakota (,185), Texas (,281), Tennessee (,311) and Louisiana (,380).

There is no indication that the robust economic health most states are enjoying will end any time soon, says Arturo Perez, a fiscal specialist with the National Conference of State Legislatures.

“We are not seeing or picking up any signs from the states that there is an issue developing regarding the flow of revenues into state treasuries at this time,” Perez says. In about two months his organization will do an in-depth 50-state survey to find out where states are relative to their fiscal year 2001 forecasts.

Data used in the Census Bureau fiscal study came from state government records, and are subject to nonsampling error — including errors of response and miscoding– the Census Bureau said.

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