News Release: Sales Tax Collections Decline in Most States, Rockefeller Institute Survey Finds

For Immediate Release –

May 1, 2008

Media contact: Mark Marchand – (518) 443-5283 / marchanm@rockinst.org

Sales Tax Collections Decline in Most States, Rockefeller Institute Survey Finds

Total Tax Revenue Slowing As Well, Preliminary Data Show

Albany, N.Y. — State sales tax revenues delivered the weakest performance in six years during the first quarter of 2008, while growth in overall state tax revenues continued to deteriorate, according to preliminary data issued today by the Rockefeller Institute of Government.

With 36 of the 45 states that collect sales tax reporting, revenue from sales taxes declined both nationwide and in 21 states during January to March 2008, compared to the same period a year earlier. Southeastern states were hit the hardest: nine of the 21 states reporting sales tax declines were in that region. When adjusted for inflation, sales tax revenues declined in at least 27 states. For the states reporting so far, the overall level of sales tax collections fell slightly – the first time such revenues have not grown in six years.

“The widespread declines in the sales tax are a leading indicator of economic weakening, and a harbinger of further state budget troubles,” said Rockefeller Institute Senior Fellow Don Boyd, co-author of the study. “While the last recession hit states hard via a collapsing income tax, weak consumer spending and declining sales taxes may play a greater role this time around. This unfortunate news comes at the very time that most states are negotiating budget agreements.”

The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public-policy academic experts throughout the country.

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About the Rockefeller Institute of Government

The Nelson A. Rockefeller Institute of Government, at the University at Albany, is the public policy research arm of the State University of New York. The Institute conducts fiscal and programmatic research on American state and local governments. Journalists can find useful information on the Newsroom page of the Web site, www.rockinst.org.

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