News Release - State Tax Revenues Across U.S. Experience Largest Decline on Record, New Rockefeller Institute Report Shows

For Immediate Release –

July 17, 2009

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

State Tax Revenues Across U.S. Experience Largest Decline on Record, New Rockefeller Institute Report Shows

Full First-Quarter 2009 Report on All 50 States Reveals Sharpest Revenue Drop in the 46 Years for Which Quarterly Data Are Available

Albany, N.Y. — Taxes collected by the 50 states dropped by 11.7 percent overall during the first quarter of 2009, compared to the same period a year earlier – the largest such decline in the 46 years for which quarterly data are available, according to the latest report on state finances from the Rockefeller Institute of Government.

Overall state tax revenues fell to the lowest first-quarter level since 2005, according to the Institute. The decline in personal income tax was particularly sharp, with an unprecedented decline of 17.5 percent, as the weakened economy continued to hammer state budgets. Forty-five of the 50 states experienced revenue drop-offs.

All regions of the country saw declines in total state tax collections, with the Far West seeing the largest decline at 16 percent. Only the Rocky Mountain and Plains regions saw single-digit declines at 5 percent and 6 percent, respectively.

Early look at 2nd quarter shows trend worsening

Early figures for April and May of 2009 show an overall decline of nearly 20 percent for total taxes, a further dramatic worsening of fiscal conditions nationwide. Preliminary figures for the state fiscal year 2009 indicate around 8 percent decline in total taxes, 13 percent in personal income taxes, and 5 percent in sales taxes.

Authors of the report – Institute Senior Fellow Donald J. Boyd and Senior Policy Analyst Lucy Dadayan – noted that local tax collections fared better than state taxes, with overall growth of 3.9 percent in the first quarter.

The Institute report regularly examines the three major sources of revenues for states: personal income taxes, sales taxes and corporate income taxes. During the first quarter of 2009, personal income taxes fell 17.5 percent. Sales tax collections were down 8.3 percent and corporate income taxes fell 18.8 percent.

“Such extraordinary weakness in revenues, along with continued if more moderate growth in expenditures, make widespread budget shortfalls highly likely this year,” Boyd and Dadayan wrote in the report.

For a full copy of the report, visit

The Institute’s Fiscal Studies Program, originally called the Center for the Study of the States, was established in May 1990, in response to the growing importance of state governments in the American federal system. Despite the ever-growing role of the states, there is a dearth of high-quality, practical, independent research about state and local programs and finances.


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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