A new report from the Rockefeller Institute’s Public Pension Simulation Project examines investment return volatility and its impact on the Michigan State Employees’ Retirement System (MISERS). The analysis found that a very conservative contribution policy can protect a plan closed to new members from becoming severely underfunded. However, for large closed plans like MISERS, the sponsoring governments may face a risk of substantial contribution increases if the plan invests in risky assets and if large shortfalls must be recouped in short periods of time. This is the seventh report of the Pension Simulation Project at the Rockefeller Institute, which examines the potential consequences of investment-return risk for public pension plans, governments, and stakeholders in government. The project is supported by the Laura and John Arnold Foundation and The Pew Charitable Trusts.
Yimeng Yin and Donald J. Boyd, March 30, 2017
The Rockefeller Institute announced that a 46-state evaluation of state income and sales tax revenues points to states lowering their tax revenue forecasts for 2017 and 2018. Although these state forecasts generally call for faster growth in 2018 than in 2017, the forecasted increase is small and revenue is forecasted to grow more slowly, potentially resulting in increased state taxes, reduced spending, or use of reserve funds for unfunded requirements.
Lucy Dadayan and Donald J. Boyd, March 27, 2017
By the Numbers: 235,000 Job Growth in February Is Good News for the Economy, But State and Local Government Job Growth Remains Weak
State and local government job growth, across the country, remains weak in comparison to strong private sector growth, according to a new Rockefeller Institute report. The study notes that state and local government employment is 1.5 percent below its prior peak, while private sector employment is 6.4 percent above its prior peak. These government jobs are essential for providing education, public safety, health care, and social services.
Lucy Dadayan and Donald J. Boyd, March 16, 2017
State Tax Revenue Report # 106: Weak Tax Revenue Growth in the Third and Fourth Quarters of 2016 Amid Uncertainty About Federal Tax Changes
State and local government revenue from major taxes increased 2.1 percent in the third quarter of 2016 from the same quarter a year ago. This is a substantial slowing from the 3.1 percent average growth for the four previous quarters. State tax revenue has been held back primarily by year-over-year declines in estimated payments of personal income tax, slow growth in the sales tax, and by outright declines in corporate income taxes and in several excise taxes. If tax revenue growth does not accelerate, many states are likely to face shortfalls in the current fiscal year and will have to lower their forecasts for next year, leading to hard choices about whether to raise taxes, reduce spending, or search for alternative budget-balancing solutions.
Lucy Dadayan and Donald J. Boyd, March 9, 2017
Don Boyd, director of fiscal policy studies for the Rockefeller Institute, today warned attendees at the National Conference of State Legislatures Atlantic States Fiscal Leaders Meeting in Boston that the increasingly older populations in the New England and Mid-Atlantic states are likely to depress state income and sales tax revenues. In his presentation, “Changing Demographics and State Tax Collections,” Boyd concluded that aging populations generate lower taxable incomes and consumption and thus lower taxes on income and sales. However, he also notes that the revenue declines are not large.
Donald J. Boyd, February 24, 2017
A new Rockefeller Institute pension model report on the Los Angeles Fire and Police Pension Plan (LAFPP) finds that even with volatility in annual returns, the risks of severe underfunding for pension funds are greatly reduced if contribution policy is conservative and participating governments pay full actuarially determined contributions in all years. This is the sixth report of the Pension Simulation Project at the Rockefeller Institute, which examines the potential consequences of investment-return risk for public pension plans, governments, and stakeholders in government. The project is supported by the Laura and John Arnold Foundation and The Pew Charitable Trusts.
Donald J. Boyd and Yimeng Yin, February 22, 2017
In the most recent report of the Rockefeller Institute’s Pension Simulation Project, Institute researchers examine the question of how much investment risk public pension funds should take. The report sheds light on the rise in investment risk-taking by public pension funds, the regulatory incentives that encourage this risk-taking, and insights from academic research on risk-taking.
Donald J. Boyd and Yimeng Yin, February 1, 2017
The latest report from the Rockefeller Institute’s Pension Simulation Project examines the difficult choices public pension funds faced as interest rates fell over the last 25 years. Public plans generally increased investment risk in an effort to avoid lowering expected investment returns, creating substantial potential for plans to become severely underfunded or to require sharp increases in government contributions in the future. This is the fourth report of the Pension Simulation Project, supported by the Laura and John Arnold Foundation and The Pew Charitable Trusts.
Donald J. Boyd and Yimeng Yin, January 10, 2017
The latest policy brief from the Rockefeller Institute’s Pension Simulation Project examines the difficult choices public pension funds faced as interest rates fell over the last 25 years. Public plans generally increased investment risk in an effort to avoid lowering expected investment returns, creating substantial potential for plans to become severely underfunded or to require sharp increases in government contributions in the future. This is the third policy brief of the Pension Simulation Project, supported by the Laura and John Arnold Foundation and The Pew Charitable Trusts.
Donald J. Boyd and Yimeng Yin, January 10, 2017
The Rockefeller Institute has introduced a Public Pension Stochastic Simulation Model that examines the year-by-year dynamics of pension fund finances. The model forecasts the long-term outcomes of specific plans with real-world characteristics under different investment return scenarios and funding policies. This report introducing the model is the third in a series focusing on the Rockefeller Institute’s Pension Simulation Project.
Donald J. Boyd and Yimeng Yin, December 7, 2016
Policy Brief: How Public Pension Plan Demographic Characteristics Affect Funding and Contribution Risk
The Rockefeller Institute has introduced a Public Pension Stochastic Simulation Model that examines the year-by-year dynamics of pension fund finances. The model forecasts the long-term outcomes of specific plans with real-world characteristics under different investment return scenarios and funding policies. This policy brief introducing the model is the second policy brief focusing on the Rockefeller Institute’s Pension Simulation Project.
Donald J. Boyd and Yimeng Yin, December 7, 2016
Director of Fiscal Policy Don Boyd gave the keynote address at the Standard & Poor’s Global Ratings annual forum on state and local government credit. Boyd spoke about public pension funds’ movement into riskier assets and the risks to sponsoring governments when the funds experience investment-return volatility. The presentation, co-authored by Yimeng Yin, covers other risks and consequences.
Donald J. Boyd and Yimeng Yin, December 1, 2016
State Tax Revenue Report #105: Widespread Declines in State Tax Revenues in the Second Quarter of 2016
State and local government revenue from major taxes tracked by the U.S. Census Bureau declined by 0.5 percent in the second quarter of 2016 compared to a year earlier. This represents a substantial slowing from the 5.0 percent average growth for the four previous quarters, according to the just-released State Revenue Report. The report also outlines potential behavioral responses by taxpayers in anticipation of post-election federal tax reform, and notes how these responses could affect state tax revenues.
Lucy Dadayan and Donald J. Boyd, November 30, 2016
The Rockefeller Institute has analyzed the potential consequences of investment return volatility of the University of California Retirement Plan (UCRP) as part of its new Pension Simulation Project. The model calculates the plan's annual cash flows and funded ratio under different investment return scenarios, funding policies, and plan characteristics. The simulation project was created to examine the potential consequences of investment-return risk for public pension plans, governments, and stakeholders in government.
Donald J. Boyd and Yimeng Yin, November 22, 2016
Funding policies common to many public pension plans can result in severe underfunding and large increases in contributions that employers are obligated to make to sustain the funds. Methods used by many plans to stabilize employer contributions can be undermined by volatile investment earnings resulting from risky assets, placing governments in the politically untenable position of facing sharp contribution increases or deeply underfunded plans. Donald Boyd and Yimeng Yin evaluate the impact of investment return volatility on these risks in a presentation made by Mr. Yin at the National Tax Association’s 2016 Annual Conference on Taxation on November 10.
Donald J. Boyd and Yimeng Yin, November 10, 2016
Rockefeller Institute Director of Fiscal Policy Don Boyd has released comments on the Actuarial Standard Board’s (ASB) Proposed Actuarial Standard of Practice: “Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions.” The ASB establishes and improves standards of actuarial practice.
Donald J. Boyd, October 31, 2016
State and local public pension fund investment risks are far greater now than in the past. This requires more analysis and disclosure of these risks to taxpayers and other stakeholders in government, as they ultimately bear most of this risk. Donald Boyd and Yimeng Yin examine these issues in a presentation for a panel that Boyd participated in on September 26 at Standards and Metrics for Public Retirement Systems, a conference in Washington, DC, organized by The Pew Charitable Trusts and the Urban Institute.
Donald J. Boyd and Yimeng Yin, September 26, 2016
State tax revenues have weakened significantly in the first quarter of 2016. The poor performance is mostly driven by the weak stock market and the steep declines in oil and gas prices. Preliminary data indicate that many states had seen negative April surprises in income tax collections and reported declines in overall state tax revenues collections in the second quarter of 2016. This weakening raises a yellow flag for state budgets.
Lucy Dadayan and Donald J. Boyd, September 22, 2016
Interest in the Rockefeller Institute’s recent report on the impact of gambling on state fiscal health has peaked in recent months as state and national media organizations have cited the Institute’s findings. The report’s author, Dr. Lucy Dadayan, has also been a featured presenter at national association conferences both in the United States and in Canada. Her presentations drew from the April 2016 Blinken Report, entitled State Revenues from Gambling: Short-Term Relief, Long-Term Disappointment.
Lucy Dadayan, August 9, 2016
State tax revenue growth slowed significantly in the second half of 2015 and, according to preliminary data, early in 2016, this according to the latest State Revenue Report. Adding to this picture of slow growth and declines, the report put a spotlight on the potential impact of this recent slowing of state revenue performance, combined with a volatile stock market and turmoil related to Brexit.
Lucy Dadayan and Donald J. Boyd, June 29, 2016
Public pension funds provide benefits to nearly 10 million people, invest over $3.6 trillion in assets, and are deeply underfunded. A new Rockefeller Institute report and policy brief put a spotlight on how the methods that public retirement systems and governments use to fund pensions are affected by investment return volatility. The analysis concludes that a typical 75-percent funded public pension plan has a one in six chance of falling below 40 percent funded within the next 30 years, a crisis level currently faced by only a few major plans. The research brief and associated report are the beginning of a series from the Rockefeller Institute of Government’s Pension Simulation Project.
Donald J. Boyd and Yimeng Yin, June 2, 2016
Policy Brief Report
April income tax returns are always uncertain for states, sometimes providing pleasant revenue surprises and sometimes unpleasant ones. These returns often are related to the stock market and capital gains in the prior year, and to estimated payments of tax. A new By the Numbers Brief says both indicators suggest that this year’s returns could be quite weak.
Donald Boyd and Lucy, April 13, 2016
States turning to gambling as a quick fix for revenue woes have been disappointed with the results, according to a new study from the Rockefeller Institute. The study warns that “State officials considering expansion of existing gambling activities or legalization of new activities should weigh the pros and cons carefully.”
Lucy Dadayan, April 2016
State tax revenue growth slowed in the third quarter of 2015, a trend that is expected to continue in the remainder of fiscal year 2016 and into 2017 according to the latest State Revenue Report. Personal income tax growth slowed to 6.5 percent and growth in corporate income taxes, sales taxes and motor fuels were weak. Fluctuations in the stock market and the drop in oil prices are two of the reasons that these trends likely will continue into the future.
Lucy Dadayan and Donald J. Boyd, March 7, 2016
Historic Decline in Oil and Coal Prices Hammers State Tax Revenue Oil has dropped from an average of $99 per barrel in 2014 to below $30 this January, the lowest level in the last 12 years. Coal prices have also fallen significantly. While lower prices are good for consumers, they are particularly bad for the economies and finances of oil- and mineral-dependent states: Alaska, Louisiana, New Mexico, North Dakota, Oklahoma, Texas, West Virginia, and Wyoming. Total tax revenues for these states have declined by 3.2 percent, while the remaining 42 states have reported 6.5 percent growth in total tax revenues. These steep commodity price declines are leading to cuts in production and employment, weakening mineral-state economies and likely leading to slower growth in state revenue from other tax sources.
Lucy Dadayan and Donald J. Boyd, February 1, 2016
By The Numbers: State and Local Government Unfunded Pension Liabilities Rise by $268 billion in the Third Quarter of 2015
Investment shortfalls in the July-September quarter of 2015 caused unfunded state and local government pension liabilities to increase by $268 billion, reaching $1.7 trillion, according to Federal Reserve Board data examined in a By the Numbers Brief of the Rockefeller Institute. The increase was a full 1.4 percent of the nation’s gross domestic product (GDP), bringing unfunded liabilities to 9.5 percent of GDP — undoing about one and a half years of improvement. In the last 25 years, unfunded liabilities have increased by 1.4 percent or more of GDP in 13 quarters, while these liabilities have fallen by 1.4 percent or more in just two quarters. These issues are particularly important given the significant stock market declines since the start of the year, suggesting that further substantial increases in unfunded liabilities are likely.
Donald J. Boyd and Yimeng Yin, January 20, 2016
Across the country, all eyes are on the record Powerball jackpot and while one or more lucky winners may be sharing a fortune, what will ticket sales do for state revenues? According to Rockefeller Institute researchers Lucy Dadayan and Don Boyd, every dollar brought in by states helps, but net revenues from lottery sales are not big in the scheme of state budgets. In their most recent By the Numbers Brief, Dadayan and Boyd indicate that gross lottery sales in fiscal year 2014 were approximately $70.2 billion, and yet net revenues for state budgets after payment of prizes, administrative costs, and other expenses made up a more modest $18.1 billion return to states, or about 2 percent of tax revenue. Despite the fact that lottery revenues are frequently directed to dedicated purposes (e.g., education), higher lottery revenue does not necessarily translate into increased state spending for those purposes.
Donald J. Boyd and Lucy Dadayan, January 13, 2016
A new brief released by the Rockefeller Institute indicates that a majority of states are forecasting slower personal income tax and sales tax revenue growth in 2016 and 2017. The sluggishness in tax revenues is partly due to expected slower growth in the economy and long-term demographic changes as well as due to volatility in stock market and prolonged declines in oil and gas prices. This will result in continued fiscal challenges and economic uncertainties for the states, the brief concludes. The Rockefeller Institute’s By the Numbers briefs were developed to spotlight emerging trends in state economies and finances.
Lucy Dadayan and Donald J. Boyd, December 23, 2015
2015 was a good year for the accuracy of state revenue forecasts according to a new brief by the Rockefeller Institute of Government of SUNY. This year’s record contrasts with that of previous years, when errors in state revenue forecasts swelled during and after the last two recessions partly due to increased tax volatility. Despite the good news, state forecasters are facing large uncertainties due to implications of the volatility in the stock market, declines in oil prices, and interest rate hikes by the Federal Reserve Board. This is the first brief in the new By the Numbers series, which will provide short summaries of evidence on key state and local fiscal issues.
Donald J. Boyd and Lucy Dadayan, December 22, 2015
State tax revenues grew by 6.8 percent in the second quarter of 2015, the final quarter of the fiscal year for 46 states, according to the most recent State Revenue Report of the Rockefeller Institute. Personal income tax growth was robust at 14.2 percent, which was driven by strong payments with final returns up 20.0 percent and estimated taxes up 18.2 percent. This trend is not expected to continue, as this year’s revenue figures were bolstered by the strong stock market of 2014. States expect fiscal year 2016 to be weaker than 2015, largely because of an anticipated slowdown in income tax revenue.
Lucy Dadayan and Don Boyd, November 16, 2015
State tax revenues grew by 5.8 percent in the first quarter of 2015, according to the 100th State Revenue Report of the Rockefeller Institute. All major sources of tax revenues showed solid growth during this period: personal tax collections grew by 7.1 percent, corporate tax revenues at 3.3 percent, sales taxes at 5.2 percent, and motor fuels at 4.4 percent. Preliminary figures for the second quarter of calendar year 2015 (the final quarter of fiscal year 2015 in most states) indicate growth in total state tax collections of 7.6 percent and particularly strong growth in personal income tax collections of 14.3 percent. State revenue forecasts call for a slowdown in total personal income tax growth to 2.7 percent in FY 2016, from 5.1 percent estimated by states for FY 2015.
Lucy Dadayan and Don Boyd, September 17, 2015
In a just released report, the Kaiser Family Foundation and the Rockefeller Institute of Government of SUNY compared the demographic, fiscal, and economic characteristics of states that have expanded Medicaid and those that have not. To date, 30 states and the District of Columbia have adopted the Medicaid expansion, while the remaining 20 states have rejected expansion or are still debating the issue.
Laura Snyder, Robin Rudowitz, Lucy Dadayan and Don Boyd, September 2, 2015
Despite the rising U.S. stock market and the fifth year of continuous growth in employment, state and local governments still face enormous fiscal challenges, including slow growth in tax revenues, cuts in most areas of spending, and difficulties in performing essential functions. Conditions will likely be inadequate to restore state government spending cuts, fund infrastructure expansion, pay for growth in Medicaid, and cover insufficiently funded public pensions, making the choices available to states even harder. This is the second of an ongoing series of reports funded by former U.S. Ambassador to Hungary Donald Blinken and his wife, Vera, longtime supporters of the Rockefeller Institute.
Donald J. Boyd and Lucy Dadayan, June 23, 2015
State Revenue Special Report: Windfall “April Surprises”: Strong Growth in Overall Income Tax Revenues Despite Weak Withholding
States that collect personal income taxes faced widespread income tax shortfalls last year and income tax windfalls this year, according to a Rockefeller Institute report. The study — Windfall “April Surprises” — examined January to April tax collections for 38 of the 41 states that impose broad-based personal income taxes. It showed income tax growth of 11.5 percent, or $13.2 billion, compared to the same period a year earlier. However, state forecasters should be careful not to overestimate revenues for future years and elected officials should not build budgets based on windfall revenues.
Lucy Dadayan and Donald J. Boyd, June 11, 2015
State Tax Revenue Report #99: Revenue Collections Show Solid Growth; Good “April Surprises” on the Horizon
Total state tax collections showed growth at 5.7 percent in the fourth quarter of 2014. Preliminary data for the January-March 2015 quarter suggests continued growth in overall tax collections. Moreover, early data on personal income tax collections for April suggest that revenue from tax returns is up considerably over last year and most states should expect good April surprises.
Lucy Dadayan and Donald J. Boyd, May 19, 2015
States’ revenues from gambling showed soft growth at 0.6 percent in fiscal 2014, despite expansion of various gambling activities in recent years. In fiscal 2014, revenue collections from lotteries and racinos grew by 0.6 and 1.5 percent, respectively, while revenue collections from casinos declined by 1.4 percent. The expansion of gambling across the nation created stiff competition for certain regions of the nation and heightened rivalry for the same pool of consumers.
Lucy Dadayan, March 23, 2015
After two consecutive quarters of declines, total state tax collections grew 4.4 percent in the third quarter of 2014. Preliminary data for the October-December 2014 quarter suggest further strength in overall tax collections. However, the growth is not evenly distributed among individual states. Officials in oil-rich states are facing new fiscal challenges due to large drops in oil prices in recent months, and subsequently large declines in severance taxes.
Lucy Dadayan and Donald J. Boyd, February 12, 2015
The new employment data from the U.S. Bureau of Labor Statistics, released on January 9th, showed strong growth in private sector employment, but a rather gloomy picture for state and local government jobs. The longer-term trends indicate no rebounding in government employment. For the nation as a whole, state and local government employment is down 3.0 percent, or 598,000 jobs, from the peak level recorded in August 2008.
Lucy Dadayan and Donald J. Boyd, January 12, 2015
After falling short in the first half of 2014, state tax revenues resumed growth in the third quarter of 2014. Tax revenues are expected to show further growth throughout the rest of state fiscal year 2015, if economic growth accelerates as expected. Personal income tax collections rose by 4.3 percent and sales tax collections grew by 5.9 percent in the third quarter of 2014. Only seven states reported declines in overall tax collections.
Lucy Dadayan and Donald J. Boyd, December 11, 2014
Total state tax collections declined by 1.2 percent in the second quarter of 2014 after softening significantly in the second half of 2013 and the first quarter of 2014. Despite this downward trend, preliminary data for the July-September 2014 quarter suggest that relatively strong growth is projected in overall tax collections and personal income tax collections for the third quarter of 2014.
Lucy Dadayan and Donald J. Boyd, November 5, 2014
According to a new technical report released by the Nelson A. Rockefeller Institute of Government, increases in state revenue forecasting errors during the recent recession were driven by increases in revenue volatility. The report discusses how revenue forecasting errors have changed in recent years and examines the relationship between revenue forecasting accuracy and (1) tax revenue volatility, (2) timing and frequency of forecasts, and (3) forecasting institutions and processes.
Donald J. Boyd and Lucy Dadayan, September 30, 2014
Preliminary data for the second quarter of 2014 indicate that state personal income tax collections declined by 7.1 percent. This is the second quarter in a row that states reported declines in personal income tax collections. The declines were much anticipated and were driven by the temporary bubble in income tax collections, mostly attributable to the so-called federal “fiscal cliff.” However, we believe personal income tax collections should resume growth in the second half of 2014.
Lucy Dadayan and Donald J. Boyd, September 17, 2014
State tax collections showed a decline of 0.3 percent in the first quarter of 2014, which follows four years of uninterrupted growth. The declines are neither surprising nor a sign of a slowing economy, but more due to the impact of the fiscal cliff, which led taxpayers to shift income from tax year 2013 to tax year 2012 to minimize federal tax liability. Early figures indicate further declines in the second quarter of 2014. However, state tax collections will likely resume the growth in the second half of 2014.
Lucy Dadayan and Donald J. Boyd, August 14, 2014
Tax returns on 2013 income that were filed in April show large and widespread declines, mostly driven by behavior of taxpayers, who shifted income from tax year 2013 to tax year 2012 to minimize federal tax liability. While many forecasters expected declines in capital gains in 2013, still it was extremely hard to forecast the magnitude of the decline, leaving many states with large shortfalls.
Lucy Dadayan and Donald J. Boyd, June 12, 2014
With the preliminary data showing declines in personal income tax collections in the first quarter of 2014, it is likely that the “April surprises” will be rather disappointing for many states. However, the “April surprises” should not be surprising. We had cautioned throughout the year that the temporary bubble in income tax collections, driven by taxpayer responses to the so-called “fiscal cliff,” would be short-lived and would burst.
Lucy Dadayan and Donald J. Boyd, May 6, 2014
The fourth quarter of 2013 brought bad news for many states as personal income tax and overall tax collections softened significantly. In the fourth quarter of 2013, states reported 0.4 percent growth in income tax collections, down from the 10.9 percent growth of a year ago. It seems that even worse news is on the horizon for many states: early figures for the first quarter of 2014 indicate possible declines in income tax collections. We believe some states anticipated this slowing and have reflected it in their budgets, but others may face unpleasant surprises. The recent slowdown makes the April tax filing season all the more important, and uncertain.
Lucy Dadayan and Donald J. Boyd, April 29, 2014
Tax data for the October-December quarter of 2013 show that personal income tax (PIT) growth slowed to 1 percent, down from 5.3 percent in the third quarter, and down from an average of 15.9 percent in the three quarters before that. The growth in personal income tax collections will likely be much softer in the first half of 2014. Sales tax revenues for the fourth quarter have been resilient, suggesting that the income tax weakening may be driven more by the depressing effects of temporary factors. However, in most states, the overall trend in tax collections for fiscal 2014 is positive.
Lucy Dadayan and Donald J. Boyd, March 11, 2014
The Rockefeller Institute, in cooperation with the State Budget Crisis Task Force, released a new report on the crisis of underfunding of public sector defined benefit plans at the National Press Club. This is the first in a series of Blinken Reports, annual analyses of key fiscal issues affecting state and local governments.
Donald J. Boyd and Peter J. Kiernan, January 2014
The new employment data from the U.S. Bureau of Labor Statistics released on January 10th showed weak growth in private sector employment in the month of December 2013, and declines in state and local government jobs. The longer-term trends indicate that both the private sector and state and local government employment are still below levels reported in December 2007, the first month of the Great Recession.
Lucy Dadayan and Donald J. Boyd, January 15, 2014
According to the new Special State Revenue Report, the growth in state tax revenues softened significantly in the third quarter of 2013. However, such slowdown is not a sign of warning, but more an indication that the impact of federal tax changes on state tax revenues had faded away and states are back to a slower revenue growth trend.
Lucy Dadayan and Donald J. Boyd, December 19, 2013
According to the new State Revenue Report, at the end of Fiscal 2013 inflation-adjusted revenue collections surpasses the peak levels recorded in fiscal 2008. While most states reported strong revenue growth in the first and second quarters of 2013, early figures indicate that the growth has softened significantly since then.
Lucy Dadayan and Donald J. Boyd, December 9, 2013
According to the new Data Alert, the growth in income tax revenue collections in the second quarter of 2013 was the strongest since the start of the Great Recession. However, the “bubble” in income tax receipts most definitely would be short-lived, and in fact should lead to slower growth later in the year.
Lucy Dadayan and Donald J. Boyd, September 2013
The Nelson A. Rockefeller Institute of Government and national financial services corporation TIAA-CREF today released a joint report on pension reform, an issue that is increasingly dominating consideration of the financial strength of the public sector. Highlighted in the document were evolving workforce demographics and long-term budget pressures. The information presented in the document resulted from a major convening of state and local officials, union leaders and researchers from across the nation, held in 2012.
Thomas L. Gais and Paul J. Yakoboski, June 2013
Despite the strong growth in overall tax collections in the fourth quarter of 2012, there is no light at the end of the tunnel. The strong growth in personal income tax collections and, particularly, in estimated payments is a strong indicator that some income was accelerated into tax year 2012. This would contribute to the uncertainties in making accurate projections of the personal income taxes in the coming quarters.
Lucy Dadayan and Donald J. Boyd, April 2013
States reported another quarter of growth in tax collections in the third quarter of 2012. Income tax revenue growth would likely be artificially accelerated in the coming quarters, driven by the federal actions to avert the fiscal cliff.
Lucy Dadayan and Donald J. Boyd, February 2013
Employment data from the U.S. Bureau of Labor Statistics show unprecedented cuts in state and local government jobs — five years after the start of the Great Recession in December 2007.
Lucy Dadayan and Donald J. Boyd, January 2013
New data show states’ tax collections grew for the 10th straight quarter through mid-2012. However, growth rates in state tax revenues have slowed, and state revenues are still lower in nominal and real terms than they were in 2008.
Lucy Dadayan and Donald J. Boyd, October 25, 2012
States’ tax collections grew for the ninth straight quarter in the first three months of 2012. Overall state tax revenues rose above pre-recession levels, as well as above peak levels that came several months into the Great Recession. Yet fiscal challenges remain. Twelve states reported tax revenue declines in the first quarter, and local taxes fell.
Lucy Dadayan, August 2, 2012
The Great Recession hit all regions of the country hard, but the experience of the Midwest has been more complicated than other regions, Thomas Gais told the Fiscal Leaders' Roundtable at the 14th Annual Midwestern Legislative Conference of The Council of State Governments. After difficult years before the recession, the Midwest, like the Northeast, has seen a faster recovery than most other regions. Yet the need for public services may be growing disproportionately in the Midwest, as seen in indicators like a lack of health insurance and increased numbers of children in poverty. Paying for more services may be especially challenging to state and local governments in the Midwest, as there has been little growth in revenues. The situation raises questions about whether economic recovery can be sustained in the region without greater public support for infrastructure and education to boost growth.
Thomas L. Gais, July 16, 2012
Local governments and school districts across the country are facing a serious fiscal crunch accelerated by weakness in property tax collections. Local property taxes dipped in the first quarter of 2012, following two quarters of growth in nominal terms, according to this report. This marked the sixth consecutive quarterly decline when collections are adjusted for inflation.
Lucy Dadayan, with the assistance of Brian T. Stenson and Donald J. Boyd, July 16, 2012
Financing for K-12 education is strained in several ways, as noted in this slide presentation. Property tax revenues are weakening, making the local tax less of a cushion against reduced state assistance. State revenues are volatile and less predictable than local taxes have traditionally been, and resources for education compete with other needs, such as health care. And the population of schoolchildren is increasing in states with lower fiscal capacities, smaller state budgets and harder-hit economies. Higher education spending, on the other hand, is growing — not through government appropriations but through greater reliance on tuition payments and is thus impacted by many factors, including federal loans and grants, interest rates, personal income and unemployment. As state differences in K-12 financing grow and higher education funding becomes more privatized, federal funding and policies may become more important. Yet federal funding for all levels of education is vulnerable — to the possibility of political inaction and automatic spending cuts, for instance.
Thomas Gais and Lucy Dadayan, May 22, 2012
States’ tax collections grew for the eighth straight quarter at the end of 2011, for the first time topping peak revenue levels seen at the beginning of the Great Recession, according to Rockefeller Institute research and Census Bureau data. Growth appears to be softening, however, and local governments are not faring as well.
Lucy Dadayan, April 19, 2012
States saw increased revenues in the fiscal year that ended in June 2011 compared to the previous year, with an overall rise of 8.9 percent in tax collections, according to recently released Census Bureau data. Tax collections still have a long way to go, however, before they recover from the deep declines caused by the Great Recession, this Institute analysis shows.
Lucy Dadayan, April 13, 2012
Tax revenues to states continued rising in the fourth quarter of 2011, but at a noticeably slower pace than earlier in the year, according to new Institute data. Collections rose 2.7 percent nationwide, the eighth straight quarter of growth since state revenues began to recover from the damage inflicted by the Great Recession.
Lucy Dadayan, March 19, 2012
Sharp declines in the number of home sales have limited local governments’ ability to establish accurate property assessments, at the same time that declining values have reduced local tax bases, a new Rockefeller Institute paper finds. This has significant implications for the success of New York’s new property tax cap.
James R. Follain, March 2012
While the private sector is reporting employment gains, state and local governments continued to cut jobs over the last year. State governments had 76,000 fewer jobs in January 2012 than a year ago, while local governments had 163,000 fewer. The decline in private sector employment, however, remains nearly twice as large as that for state and local governments combined.
Lucy Dadayan, February 17, 2012
States’ tax collections grew for a seventh straight quarter and are now topping pre-recession levels, though they remain below peak levels seen after the recession's start, according to this Institute report. Looking forward, the rate of revenue growth may slow in light of broad economic trends. New to this quarterly report is an analysis of states’ fiscal positions at the end of fiscal year 2011.
Lucy Dadayan, January 26, 2012
Giving and Getting: Regional Distribution of Revenue and Spending
in the New York State Budget, Fiscal Year 2009-10
Downstate gives more to the state in taxes and revenues than it gets back in expenditures for services and other assistance. Upstate, on the other hand, gets more than it gives, according to this report , which analyzes the regional distribution of revenues collected and dollars spent within the New York State budget. The report examines actual receipts and expenditures for the 2009-10 fiscal year. The study considered "state funds" only, excluding federal assistance and state expenditures supported by such aid.
December 20, 2011
Preliminary 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. Collections increased by 7.3 percent in the third quarter of 2011 compared to the same quarter of 2010. While still strong, revenue growth was more moderate than in the previous three quarters.
Lucy Dadayan, December 8, 2011
While states' revenues are now growing, challenges remain, especially in light of an outlook for slow economic growth, Deputy Director Robert Ward told a conference of the Lincoln Institute of Land Policy and New England Public Policy Center of the Federal Reserve Bank of Boston. His presentation reviewed recent fiscal trends for states and localities, and pointed to some choices elected leaders may need to consider in “an era of fundamental change” for public finance.
Robert B. Ward, December 2, 2011
State tax revenues grew again in the second quarter of 2011 — the end of the fiscal year for 46 states — marking six straight quarters of year-over-year growth and the strongest annual gains since 2005, according to this Institute report. State collections from personal income taxes took a dramatic jump — rising more than 16 percent — in the April-June quarter, compared to the same period of 2010. But tax collections for local governments have headed in the opposite direction.
Lucy Dadayan and Robert B. Ward, October 26, 2011
Economic conditions during the Great Recession have exacerbated longer term trends, hitting Southern and Western states particularly hard, Institute Director Thomas Gais told the National Federation of Municipal Analysts at a conference in Austin, Texas. As this slide presentation shows, those regions have also experienced the greatest population growth over the last decade. But the added population has included both employed individuals and needy ones — poor children, the elderly and uninsured people. These are also states with smaller governments and political cultures that have inhibited tax revenue growth. And Southern and Western states have been particularly dependent on federal assistance, which is being cut. So in addition to the pension liability issues hitting historically large-government states in the Northeast and Midwest, states in the Mountain West and South may be facing increased gaps between needs and resources, straining their ability to deal with health and poverty-related issues.
Thomas L. Gais, October 20, 2011
Errors in states' revenue estimates have worsened during the fiscal crises following the last two recessions, in large part because of the rising importance of capital gains and other volatile sources of income, Institute Deputy Director Robert Ward told the Federation of Tax Administrators' Revenue Estimation and Tax Research Conference. Citing the Institute's March 2011 report on revenue estimates, Ward suggested policymakers consider establishing stronger reserves and limiting reliance on volatile elements of their tax systems.
Robert B. Ward, October 19, 2011
State tax revenues showed strong growth in the second quarter of 2011, with an 11.4 percent year-over-year increase in total collections, preliminary data show. Tax collections have been rising for six straight quarters, but remain below peak levels.
Lucy Dadayan, September 1, 2011
New York State’s economic performance has lagged the nation’s for decades. But here's a surprising fact: Employment trends in the Empire State beat the national average for four straight years before, during and after the Great Recession. Two big questions: Why? And, what does this suggest for economic-development policy in New York?
Robert B. Ward, August 31, 2011
While the private sector has added a modest number of jobs over the last 17 months, state and local governments have shed positions for 29 months now, according to data released July 22. The decline in education jobs — which account for the largest number of local government positions — is far greater than in any recent recession dating back to the 1970s.
Lucy Dadayan and Robert B. Ward, July 22, 2011
States’ tax revenues grew by 9.3 percent in the first quarter of 2011, marking the fifth straight quarter of growth, according to this Institute report. Preliminary data indicate growing revenue strength through the second quarter, although such robust gains are not expected to last. Local tax revenues declined for the second straight quarter, due primarily to weak property tax collections.
Lucy Dadayan, July 2011
Lucy Dadayan and Robert B. Ward, June 23, 2011
Preliminary tax collection data for the January-March quarter of 2011 show strong growth in overall state tax collections as well as for personal income tax and sales tax revenue, according to this Data Alert. However, tax revenue collections are still below peak levels. The Rockefeller Institute's compilation of data from 47 early reporting states shows collections from major tax sources increased by 9.1 percent in nominal terms in the first quarter of 2011 compared to the same quarter of 2010. That represented the third consecutive quarter of increasing strength in revenues. Tax collections now have been rising for five straight quarters, following five quarters of declines, but were still 3.1 percent lower in early 2011 than in the same period three years ago.
Lucy Dadayan and Donald Boyd, May 24, 2011
States’ tax revenues finished 2010 strong, with 7.8 percent growth in the fourth quarter and solid gains continuing in early 2011, this Institute report shows. Tax collections by local governments, however, declined by 2.3 percent in the fourth quarter of 2010, driven mostly by declines in property tax collections.
Lucy Dadayan and Donald J. Boyd, April 19, 2011
It will be a long road to fiscal recovery for the states after the recent recession, which was far worse than past recessions, Senior Fellow Donald Boyd told the Annual Meeting of the Government Investment Officers Association. Fiscal decisions made — including the use of temprorary tax revenue and federal stimulus funds — soften the blow while stretching out the duration of the crisis. Longer term pressures loom, including increasing costs for pensions, retiree health care and Medicaid, along with cuts in the federal budget.
Donald J. Boyd, March 18, 2011
States have been making more serious errors in estimating their revenues during tough economic times, according to this report by the Pew Center on the States and the Rockefeller Institute. Driven largely by increasing volatility in state revenue systems, this trend has major implications for officials who set budgets for programs and services while grappling with severe fiscal shortfalls.
The Pew Center on the States and the Rockefeller Institute of Government, March 1, 2011
After the deepest recession since the Great Depression, most states are on the gradual road to tax revenue recovery, according to this Rockefeller Institute report. Final third-quarter and early fourth-quarter data signal an upward trend. Yet several indicators suggest broad state fiscal conditions remain fragile.
Lucy Dadayan and Donald J. Boyd, February 2011
In this presentation to the Legislative Conference of the New York Association of Counties, Senior Fellow Donald Boyd analyzed the effects of tax caps. Tax caps can be effective at reducing property taxes and government expenditures in areas like education, he concluded, but not the overall size of the public sector.
Donald J. Boyd, February 8, 2011
Senior Fellow Donald Boyd made this presentation to the Lincoln Institute of Land Policy and the New England Public Policy Center of the Federal Reserve Bank of Boston. While states' revenue crisis is easing, the fiscal crisis continues, he explained, as the recent recession was worse than those in previous decades.
Donald J. Boyd, January 21, 2011