Light at the End of the Tunnel (it’s Not Another Train) State and Local Tax Collections Up
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States make gains in taxes- USA today
A major concern across the country has been reduced local and state tax collections arising from reduced sales of goods and services (cars, bars, burgers, shoes, electronics etc) and lowered property taxes from declining property values. The best expression of consumer confidence is how much they are buying. And good news is that U.S. consumers are back and local tax collections are rising–at least when comparing the first nine months of 2010 versus the same period in 2009.
Overall, tax collections were up 6 percent in the period—the largest increase net of inflation since 1999. Not all is good news, however, as much of the increase is Federal Money
- States now employ more employees than prior to the recession (not good—just an indication that government continues to grow even in a down economy, although local governments continue to thin their workforce.
- The number one source of funds has been Washington, DC—and unfortunately much of that money was borrowed—totally $200 billion since February 2009
- Washington, DC will provide an added $50 billion in state and local revenues in the first six months of 2011—again borrowed money
- Some of the increased tax collections is from an increased tax rate for property taxes—not an increase in property values (see my post from January 1st)
- Comparative State Sales, Cigarette, Alcohol and Gasoline taxes can be seen at http://www.taxfoundation.org/taxdata/show/245.html (another excellent Tax Foundation Study)
- Combined State and Local Sales Tax Averages can be seen at http://www.taxfoundation.org/publications/show/25395.html (yep–another great Tax Foundation Report)
The Tax Foundation compares relative 2011 tax incidence on a state-by-state basis and can be seen at http://taxfoundation.org/files/bp60.pdf