Growth Of State Tax Receipts Slows, Local Tax Receipts Improve

The growth of state tax receipts slowed in the third quarter of 2015, according to data from the Nelson A. Rockefeller Institute of Government, Albany, N.Y. Year-over-year tax-receipt growth for the third quarter rose 3.8% following increases of 6.9% in the second quarter ’15 and 5.1% in the first quarter.

What’s more, the Institute expects growth in 2016 and 2017 to trail the overall 7.8% actual growth reported for all of fiscal 2015. Based on forecasts from 36 states, the research organization expects state income tax receipts to grow 4.6% in 2016 and 4.4% for 2017. State sales tax receipts are forecast to grow 3.5% for 2016 and 3.9% for ’17.

“Recent fluctuations in the stock market and the significant drop in oil prices cause us concern about state tax collections,” said the report’s co-authors.

Local tax receipts, on the other hand, have been improving recently as the housing crisis eases and home prices rise again. About two-thirds of local tax revenues come from property taxes. The four-quarter moving average for the period ending September 2015 3.4% was the best four-quarter period since the start of the Great Recession. For the third quarter itself, local property tax receipts grew 4.1% in nominal terms versus the year prior period. Local sales tax receipts jumped 17.2% and local income tax receipts rose 27.4%.

State and local tax revenues helped fund capital spending for publicly funded foodservice operations including schools, colleges and universities and public healthcare.

The full quarterly report, which details state-by-state tax receipt trends, is available at rockinst.org. “””