Thursday, June 18, 2009

State income tax receipts plunge

From the Wall Street Journal:
State income-tax revenue fell 26% in the first four months of 2009 compared to the same period last year, according to a survey of states by the nonprofit Nelson A. Rockefeller Institute of Government.

The report, conducted by the public-policy research arm of the State University of New York, is one of the most up-to-date measures of how deep the recession is digging into Americans' wallets and, consequently, state coffers.

States are required by law to balance the budget, so lower tax revenues will translate in service cuts, rather than red ink. Already states such as Kansas are slowing the payment of income-tax refunds and delaying payments to local school districts, according to the report.

Withholdings from the first four months of 2009 were down 6.9% from the same period in 2008, signaling that "many people had a very bad start of the year" with lower salaries and wages, says Don Boyd, a senior fellow at the Rockefeller Institute. ...

Article here. Yikes -- A 26% drop in tax revenue from a year ago. That's gonna leave a mark on state budgets. Read the survey report here.

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