News Release - States Continued to See Sharp Declines in Tax Revenue

For Immediate Release –

November 23, 2009

Media contact: Mark Marchand – (518) 443-5283 /

States Continued to See Sharp Declines in Tax Revenue During Third Quarter of 2009, Preliminary Rockefeller Institute Report Shows

Data From 44 States Reveal 10.7 Decline During Third Quarter of 2009

Albany, N.Y. — The nation’s prolonged economic downturn continued to sap the states’ fiscal strength during the third quarter of 2009, with overall tax revenues declining for the fourth consecutive quarter, according to a preliminary report issued by the Rockefeller Institute of Government today.

For the 44 states reporting third-quarter results, overall tax revenues declined 10.7 percent, compared to the same period a year earlier. The most significant decline occurred in the corporate income tax category, with a drop-off of 19.4 percent.

For the two other primary sources of state tax revenues — personal income taxes and sales taxes — the declines were 11.4 and 8.2 percent, respectively. Further declines are expected to continue in the fourth quarter, the report noted.

Overall, the tax revenues collected by the 44 states fell from $134 billion during the third quarter of 2008 to $119.7 billion during the same period this year. Data were not available for the following states: Missouri, Nevada, New Mexico, Rhode Island, Texas and Wyoming.

“While stock indices have risen in recent months and some other indicators point to some strengthening in the economy, overall conditions remain weak,” the authors said in the report. “Most economists believe that a stronger move toward recovery is still at least some months away.

“Thus, further revenue shortfalls and more spending cuts are most likely on the way for many states — particularly those that did not take significant actions to balance revenues and expenditures in their Fiscal Year 2010 budgets.”

Regional differences

States in the Southeast region experienced the smallest overall decline in tax revenue collections, with a reduction of 8.1 percent. States in the Southwest and Rocky Mountain regions saw the largest declines: 21.5 percent and 15.7 percent, respectively.

The Institute will issue a complete report on the third quarter of 2009 in several weeks, when final U.S. Census data become available. At that time, the Institute will also issue a further outlook on the remainder of 2009 and for 2010.

The report issued today was written by Lucy Dadayan, a senior policy analyst at the Institute, and Donald J. Boyd, a senior fellow at the Institute.

For a full copy of the report, visit


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,

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