Precipitous Drop In State Tax Collections

The cutback in consumer spending is seriously impacting state budgets. Here are a few recent headlines.

New York: Sales-tax revenue in counties, state continues steep drop http://www.pressconnects.com/article/20 ... steep+drop

October 9, 2009

ALBANY -- Sales-tax collections for counties and the state dropped 8.3 percent in the third quarter, a troubling sign for governments already struggling with higher costs and declining revenue.

The figures from July through September continue a precipitous drop in sales-tax revenue for governments and an indication that the economy is still struggling. It's the fourth consecutive quarter of sales-tax declines for the state.

What's also troubling, government officials said, is that they hoped the third quarter would have marked improvement, particularly because of the popularity of the federal Cash for Clunkers program and back-to-school retail sales.

The third-quarter drop, though, was pronounced in some counties compared to the same period last year. The lower sales-tax revenue has been a major factor in the state's $3 billion mid-year budget gap, which Gov. David Paterson is trying to close with the Legislature.

Georgia: State Tax Collections Drop Sharply http://wsbradio.com/localnews/2009/10/s ... p-sha.html

October 9, 2009

ATLANTA (AP) Georgia tax collections dropped by about 16 percent in September over the same month last year, continuing a trend set in the first two months of the fiscal year, Gov. Sonny Perdue announced Thursday.

Net revenue collections for September were about $1.3 billion, compared to about $1.6 billion in September 2008. Three months into fiscal year 2010, revenues are down about 14 percent compared to the first three months of last fiscal year.

"There's still some weakness in the economy, which results in lower tax collections, both in sales tax and income tax, and that's really affecting us," said Perdue spokesman Bert Brantley.

But Brantley acknowledged that September's revenue drop, which was as steep as the month before, can't be explained away by lingering refund checks from the last fiscal year.

"There's not as clear of a reason why" for the drop in September, he said.

The clear reason why is people are unemployed and broke.

Texas: State sales tax collections down for 8th month in a row http://www.statesman.com/business/conte ... taxes.html

October 10, 2009

State sales tax collections fell 12.5 percent last month, the eighth drop in a row.

Comptroller Susan Combs said Friday that the trend is likely to continue through the end of the year.

At some point sales tax revenue will stop falling. However, the rebound that that states are expecting will not materialize.

Iowa: Tax collections forecast to drop 7.1 percent; steep budget cuts expected http://blogs.desmoinesregister.com/dmr/ ... -expected/

October 7, 2009

Tax collections will run about 7.1 percent lower than predicted last spring, new projections show, which means steep cuts to state spending are in Iowa’s near future.

A three-member panel of experts called the Revenue Estimating Conference predicts state revenue this budget year will be $5.438 billion.

That’s $414.9 million less than predicted in March.

“It’s dire. It’s severe. It’s probably the worst I’ve seen,â€