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State Finances Slowly Improving Across U.S., Data Shows

June 18, 2015
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State government tax revenues increased by 2.2 percent in FY14, according to the U.S. Census Bureau's 2014 Annual Survey of State Government Tax Collections. The uptick marks the fourth consecutive year of modest revenue growth. Data from the National Association of State Budget Officers' (NASBO) Fiscal Survey of States: Spring 2015 corroborates this trend, indicating increases in state revenues and proposed spending. NASBO found that 42 executive state budgets proposed spending increases for FY16.

The Census Bureau found that general sales and gross receipt taxes drove most of the FY14 state revenue growth. Additional increases came from corporate income tax, severance taxes and motor fuel taxes. At the same time, revenues from amusement and alcoholic beverage licenses were down by 22.1 percent and 12.4 percent, respectively.

North Dakota led the nation in growing its proportional revenues, with an increase of 15.5 percent between fiscal years 2013 and 2014. The largest dollar increases in revenue came in the largest state economies: California, Texas and, especially, Texas. Texas posted the nation's third largest proportional increase (6.7 percent) and second largest absolute increase (from $51.8 billion to $55.3 billion) in the survey.

Access the Census survey data...

NASBO attributes the rise in revenues to the economic recovery following the Great Recession, but notes that the recovery has led to greater disparities in regional economic performance. Over the last few years, the decline in oil prices has led to growing unemployment in some energy-producing states, placing a greater burden on state spending. The recession also continues to have a effect on state fiscal health. Investment in infrastructure, K-12 education and other core spending areas that was deferred during the recession now requires significant outlays, according to the report. In many states this has created a larger deficit, despite growing revenues.

Download The Fiscal Survey of States: Spring 2015...

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