Thursday, April 01, 2010

Lagging Indicator Alert: State Revenues Rising

The economy has improved, and now we’re seeing one of the lagging indicators catch up: Tax revenues.  Well, some of them:

State and local tax collections rose above year-ago levels in the fourth quarter for the first time in more than a year as gains in property taxes and corporate income taxes offset continued declines in other revenue sources, the Census Bureau said.

State and local governments collected $360 billion in tax revenue in the fourth quarter of 2009, up 0.8% from the same quarter a year ago, the Census said week. It was the first year-over-year gain since the third quarter of 2008.

Property taxes, the primary source of funding for many local governments, rose 5.8% to $170 billion.

The report suggests that tax revenue is no longer in the freefall that followed the aftermath of the recession.

The gain in property taxes offset declines in other sources of funding. Personal income taxes fell 4.7% in the fourth quarter of 2009 versus the same period a year earlier. That was the smallest drop in a year and compared with declines of 12% and 28% in the two preceding quarters

Overall good news.  When employment picks up, maybe the personal income tax numbers will go up, too.

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