State Tax Revenues Grow For Third Straight Quarter

After falling dramatically for nearly two years, state tax revenues rose for the third straight quarter in the third quarter 2010, according to preliminary data from the Rockefeller Institute of Government. Total state tax revenues rose 3.9% in the third quarter versus the third quarter ’09, following gains of 2.5% in the first quarter and 2.3% in the second quarter. The Institute, based in Albany, N.Y., said 42 states reported increased revenues. Adjusting for inflation, real revenues rose 2.6%.

In spite of the gains, state tax revenues remain 7% below the third quarter ’08. The Institute said the increases are a result of both legislative changes, as state raise taxes to offset falling revenues, and a gradually improving economy.

State and local tax revenues are important sources of funding for publically funded noncommercial operators.