state revenue

An improved fiscal picture emerged for many states in 2013 with several states recently reporting year-end surpluses. Revenue growth and modified tax policies largely contributed to the rebound. Some analysts warn this trend could be short lived, however. State year-end balances are projected to fall by the close of FY14, according to a report from the National Conference of State Legislatures (NCSL), and fiscal analyses from states including Alaska, Connecticut and Illinois, point to large deficits on the horizon.

City finance officers were better able to meet financial needs in 2013 than in 2012 and, despite national economic indicators pointing to continued slow growth, improved conditions for city budgets are projected for 2014 and beyond. These are among the findings in the National League of Cities annual survey on city fiscal conditions. Sales and income taxes seem to be a bright spot for cities. In 2012, city sales tax receipts increased over previous year receipts by 6.2 percent, similar to growth levels seen prior to the recession. City finance officers also reported year-over-year growth of 4.4 percent for 2012 in income taxes and are projecting growth of 2.3 percent for 2013. The report's authors warn that city fiscal conditions remain vulnerable to external policy shifts, including cuts in federal spending. Additionally, pension and health care costs continue to be a drag on municipal budgets. Read the report.

Politics often gets entangled in economic development policy, occasionally around the incendiary argument around who are the “makers” and who are the “takers.” The Bureau of Economic Analysis (BEA) provides data on the amount of government transfers to households including those related to Social Security, Medicare, Medicaid, income maintenance programs and unemployment insurance. Civic Analytics, based in Texas, composed a data set of these BEA statistics alongside figures on Total Personal Income (TPI) in U.S counties (with the exception of Alaska that does not collect a personal income tax) to inject statistical foundations in the discussion. Read the civic analytics article...

Knowing when to implement budget cuts or reserve measures and how to reduce expenditures while minimizing service disruption are valuable best practices that can be shared as a result of the recession’s impact to state fiscal conditions. These messages are among several recommendations from the National Association of State Budget Officers (NASBO) outlined in a new report. Modifying the timing of temporary tax increases is one such example. For many states that enacted tax increases on a temporary basis, the result was continued fiscal stress as the national economy followed a trajectory of slow growth. However, states could better ensure that revenues will recover and budget stability is reached before revenue actions sunset or expire if they were to tie the tax increases to economic conditions or revenue collections rather than the fiscal or calendar year, the report concludes. Examples of state actions are coupled with commentary from budget officers to highlight both the severity of the fiscal crisis across states and the different paths to recovery taken by state leaders. Read the report…

Businesses on SUNY campuses outside of New York City, and on certain designated private campuses, will be exempt from sales, property and corporate state taxes under a new initiative unveiled this week by New York Gov Andrew Cuomo. In addition, employees of these businesses will be exempt from income taxes. Eligible businesses must have a relationship with the host university related to its academic mission. The state will offer an additional 3 million square free of tax-free commercial space at New York private universities as part of the Tax-Free NY initiative. Read the announcement...