10/28/2021

Fiscal 50: State Trends and Analysis

Declines in 32 states dragged down total state tax revenue in the second quarter of 2016, after accounting for inflation and seasonal fluctuations. States collectively took in 5.5 percent more tax revenue at the midpoint of 2016 than they did in the third quarter of 2008, before receipts fell during the downturn. That compares with a post-recession high of 6.6 percent in the first quarter of 2016.

In the seven years since the recession ended, widespread declines in quarterly state tax revenue have been rare. The only other exception occurred in the first half of 2014 after taxpayers shifted income in response to federal tax changes. The latest declines were largely driven by economic factors, including low energy prices, downturns in the stock market in 2015 and early 2016, and lackluster growth in consumer spending. Tax cuts also contributed to recent declines in a handful of states.

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