Magazine article Government Finance Review

States Grapple with Weaker Than Projected Tax Receipts

Magazine article Government Finance Review

States Grapple with Weaker Than Projected Tax Receipts

Article excerpt

In April 2017, total state income tax revenue was down 4 percent compared to the previous year, according to a report from the Rockefeller Institute of Government. The "Shortfalls on States' April Tax Returns: Trump Effect, Weak Economy, or Both?" report --which examined the April 2017 tax receipts for 41 states with broad-based income taxes--also found that:

* The lower total state tax revenue from April 2017 was driven by declines of 7.3 percent in final returns and 4.3 percent in estimated payments, more than offsetting 5.3 percent growth in withholding tax collections.

* April 2017 income tax revenue fell in 24 of 41 states. The declines were largest in the New England and Mid-Atlantic states, followed by Southern states. April revenue was up in the Great Lakes and Rocky Mountain states.

* Although many states had forecasted declines in April and May 2017, they were worse than expected. Nineteen out of 21 states that publish monthly cash flow forecasts fell short by a median 6. …

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