State, local Q1 tax revenue up
Slight increase in state and local tax collections in the first quarter of this year puts total take at levels of boom years 2006 and 2007, but politicians still claim there is a crisis.
Before state and local officials start their spending spree based on the latest glimmer of hope in tax collections, they should take a look at details in the data showing economic recovery might not be quite as glorious as it seems, at least for Americans paying the taxes.
Latest numbers for the first quarter of this year show a 0.8 percent increase over the
same quarter last year, about $2.4 billion. It’s the first two consecutive quarters of increases since 2008.
They took almost $10 billion more from taxpayers in the first three months of this year than they did in the same period just four years ago.
And according to the data released Tuesday by the U.S. Census Bureau, cumulative tax collections for the previous 12 months ending in March were up $8.5 billion over the same time just three years ago.
The numbers prove states and municipalities don’t have a revenue problem. They are squeezing billions of dollars more out of citizens and businesses than ever, but they say it is not enough.
What they have is a spending problem.
The first quarter of 2010 brought in $299 billion compared to $289 billion in 2006. The 12 months ending in March brought in $1.24 trillion compared to $1.23 trillion in 2007.
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How many American households and businesses are making more than they were then? When comparable numbers come out in August, we’ll find out.
But we can get a pretty good idea just from the tax collection statistics.
Two tax categories that have not improved despite big increases inflicted by state and local politicians over the last four years are “Individual Income” and “Corporation Net Income.”
While total collections are beating those in 2006, individual income tax collections are off 3 percent and money squeezed from businesses is down 9 percent. Sales and motor fuel taxes remain down.
The only big one holding steady from last year and up 14 percent since ’06 is property taxes. But the next round of assessments should whack that back to reality.
What the numbers show is that while state and local governments inflict more and more taxes on citizens and businesses who pay the bills for everybody else, that shakedown is bringing in less and less revenue.
Why? Because incomes are down, way down. Just look at the tax receipts.
And politicians who went on a bubble-based spending binge refuse to share the sacrifice when it burst.
States and municipalities have claimed a revenue crisis for the past two years comparing tax collections to historic highs in 2007 and 2008 when they were derelict in paying down debt and doing their public duty to taxpayers.
Now is no time — while average Americans and businesses still are being squeezed by an economy showing few signs of resurrection, and with an inevitable property tax crash on the horizon – to go on another spending binge just because revenues are up.
Frank Keegan is a national editor for the Franklin Center on Government and Public Integrity. His Failing States column can be found every week at franklincenterhq.org and watchdog.org where it also is available as a podcast.








