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ALBANY, N.Y. ---- Preliminary tax collection data for the July-September quarter of 2011 show growth in overall state tax collections, as well as for personal income tax and sales tax revenue, for the seventh consecutive quarter. While still strong, revenue growth was more moderate than in the previous three quarters. We will provide a full report on the July-September period after Census Bureau data for the quarter are available.
The Rockefeller Institute's compilation of data from 48 early reporting states shows collections from major tax sources increased by 7.3 percent in nominal terms in the third quarter of 2011 compared to the same quarter of 2010. This is a noticeable slowdown from the 10.8 percent year-over-year growth reported in the second quarter of 2011. Tax collections now have been rising for seven straight quarters, following the five quarters of declines that were brought on by the Great Recession.
Among 48 early reporting states, all but three showed gains during the third quarter. Personal income taxes again provided a particularly strong contribution to state treasuries with growth of $5.1 billion or 9.2 percent. For a fourth consecutive quarter, sales taxes also rose, but more modestly than income taxes, by $2 billion or 3.9 percent for the period (see Table 1).
Table 2 shows state-by-state figures for the change in major tax revenues during the third quarter of 2011 compared to the same quarter a year earlier. In terms of dollars, Illinois, Texas and Alaska reported the largest increases in overall tax collections, with gains of $1.7 billion, $1.2 billion and $0.8 billion respectively. In Illinois, the significant increase in tax collections is largely attributable to the legislated tax increases that took effect as of January 2011. The extraordinary growth in tax collections in Alaska and North Dakota ---- each state's revenues more than doubled from the same period a year ago ---- is mostly attributable to growth in severance taxes driven by higher oil and mineral prices. According to preliminary data, 11 states reported double-digit growth in total tax collections. Nine states reported double-digit growth in personal income taxes, 13 in corporate income tax collections, and seven states in sales tax revenues.
After seven quarters of growth, overall state tax revenues have recovered to pre-recession figures. Most states have not yet returned to peak levels, however, because those levels came several months into the Great Recession.
Table 1: All Major Taxes Showed Continued Growth in the Third Quarter of 2011
Percent Change in State Tax Collections vs. Same Quarter Year Ago
|
Quarter
|
PIT
|
CIT
|
Sales
|
Total
|
| 2007 Q1 |
8.5
|
14.8
|
3.1
|
5.2
|
| 2007 Q2 |
9.2
|
1.7
|
3.5
|
5.5
|
| 2007 Q3 |
7.0
|
(4.3)
|
(0.7)
|
3.1
|
| 2007 Q4 |
3.8
|
(14.5)
|
4.0
|
3.6
|
| 2008 Q1 |
4.8
|
(1.4)
|
0.7
|
2.6
|
| 2008 Q2 |
8.1
|
(7.0)
|
1.0
|
5.4
|
| 2008 Q3 |
0.9
|
(13.2)
|
4.7
|
2.8
|
| 2008 Q4 |
(1.9)
|
(23.0)
|
(5.3)
|
(4.0)
|
| 2009 Q1 |
(19.4)
|
(20.2)
|
(8.4)
|
(12.2)
|
| 2009 Q2 |
(27.7)
|
3.0
|
(9.5)
|
(16.3)
|
| 2009 Q3 |
(11.5)
|
(21.3)
|
(10.1)
|
(11.0)
|
| 2009 Q4 |
(4.1)
|
0.7
|
(4.8)
|
(3.1)
|
| 2010 Q1 |
3.6
|
0.6
|
0.1
|
3.3
|
| 2010 Q2 |
1.3
|
(19.0)
|
5.7
|
2.0
|
| 2010 Q3 |
3.9
|
0.5
|
4.2
|
4.6
|
| 2010 Q4 |
10.6
|
18.1
|
5.0
|
7.6
|
| 2011 Q1 |
12.9
|
8.5
|
6.3
|
9.5
|
| 2011 Q2 |
16.5
|
19.1
|
2.9
|
10.8
|
| 2011 Q3 (preliminary) |
9.2
|
5.2
|
3.9
|
7.3
|
Table 2: Percent Change in State Tax Revenue
Quarterly Tax Revenue by Major Tax, Early Reporting States
July-September 2010 to 2011, Percent change
| |
PIT
|
CIT
|
Sales
|
Total
|
| United States |
9.2
|
5.2
|
3.9
|
7.3
|
| New England |
8.7
|
12.6
|
3.9
|
6.6
|
| Connecticut |
12.2
|
6.1
|
14.3
|
10.5
|
| Maine |
3.5
|
21.6
|
5.8
|
4.0
|
| Massachusetts |
8.2
|
16.1
|
0.2
|
6.5
|
| New Hampshire |
NA
|
14.7
|
NA
|
3.0
|
| Rhode Island |
8.9
|
(34.3)
|
0.0
|
2.1
|
| Vermont |
9.2
|
(3.4)
|
5.0
|
4.2
|
| Mid-Atlantic |
5.1
|
5.7
|
4.0
|
3.6
|
| Delaware |
(29.4)
|
(32.1)
|
NA
|
(13.8)
|
| Maryland |
3.9
|
(5.9)
|
8.2
|
4.1
|
| New Jersey |
2.1
|
10.6
|
2.0
|
2.6
|
| New York |
7.2
|
9.7
|
4.4
|
4.6
|
| Pennsylvania |
3.8
|
1.8
|
3.5
|
3.5
|
| Great Lakes |
24.2
|
32.8
|
7.6
|
14.7
|
| Illinois |
71.7
|
78.9
|
13.1
|
38.8
|
| Indiana |
12.0
|
36.6
|
7.5
|
10.2
|
| Michigan |
4.8
|
17.6
|
7.0
|
5.4
|
| Ohio |
8.1
|
NM
|
5.0
|
9.7
|
| Wisconsin |
6.0
|
7.3
|
3.8
|
5.0
|
| Plains |
6.1
|
1.6
|
6.6
|
7.7
|
| Iowa |
3.8
|
(3.7)
|
1.9
|
(3.5)
|
| Kansas |
7.2
|
(17.5)
|
12.2
|
7.3
|
| Minnesota |
9.7
|
13.4
|
4.1
|
4.9
|
| Missouri |
2.2
|
(21.4)
|
3.8
|
(0.0)
|
| Nebraska |
3.1
|
123.8
|
0.9
|
4.6
|
| North Dakota |
20.8
|
(94.6)
|
40.8
|
157.0
|
| South Dakota |
NA
|
NA
|
10.6
|
18.9
|
| Southeast |
7.8
|
(1.4)
|
3.1
|
6.5
|
| Alabama |
9.1
|
(58.9)
|
4.8
|
3.5
|
| Arkansas |
5.4
|
4.5
|
(0.4)
|
2.5
|
| Florida |
NA
|
2.5
|
4.1
|
3.9
|
| Georgia |
11.5
|
(16.5)
|
3.0
|
7.2
|
| Kentucky |
4.8
|
31.8
|
7.1
|
5.3
|
| Louisiana |
9.7
|
(52.5)
|
2.0
|
4.3
|
| Mississippi |
5.3
|
3.6
|
1.9
|
3.8
|
| North Carolina |
7.6
|
15.3
|
(5.1)
|
17.1
|
| South Carolina |
6.6
|
19.7
|
3.8
|
4.7
|
| Tennessee |
NA
|
(8.3)
|
6.0
|
4.0
|
| Virginia |
6.8
|
7.7
|
7.1
|
6.4
|
| West Virginia |
7.3
|
8.3
|
4.3
|
3.2
|
| Southwest |
10.8
|
9.3
|
10.8
|
13.6
|
| Arizona |
9.8
|
10.9
|
8.4
|
18.9
|
| New Mexico |
ND
|
ND
|
ND
|
ND
|
| Oklahoma |
12.5
|
5.3
|
8.3
|
8.9
|
| Texas |
NA
|
NA
|
11.4
|
13.1
|
| Rocky Mountain |
7.1
|
1.4
|
3.5
|
5.4
|
| Colorado |
5.0
|
0.1
|
8.0
|
5.7
|
| Idaho |
4.7
|
24.7
|
4.7
|
4.6
|
| Montana |
13.1
|
36.9
|
NA
|
14.3
|
| Utah |
10.6
|
(19.9)
|
(4.5)
|
2.3
|
| Wyoming |
NA
|
NA
|
11.9
|
9.6
|
| Far West |
7.0
|
(9.0)
|
(3.8)
|
4.2
|
| Alaska |
NA
|
3.2
|
NA
|
124.4
|
| California |
6.4
|
(9.3)
|
(6.4)
|
0.2
|
| Hawaii |
ND
|
ND
|
ND
|
ND
|
| Nevada |
NA
|
NA
|
6.3
|
4.9
|
| Oregon |
12.0
|
(7.9)
|
NA
|
10.4
|
| Washington |
NA
|
NA
|
4.4
|
5.5
|
Source: Individual state data, analysis by Rockefeller Institute.
Notes: NA - not applicable; ND - no data; NM - not meaningful.
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