U.S. states saw their tax revenue drop by about $31 billion, or 6 percent, from March through August, compared to the same period a year earlier, as the pandemic triggered economic shutdowns across the country, according to data from 44 states compiled by the Urban Institute.
The scale of the drop appears smaller than expected, relative to the depth of the economic contraction, and comes after several states have reported that their revenue didn’t decline as much as anticipated despite business shutdowns and increased unemployment. In August, when much of the country was reopening, state revenue climbed about 1.1 percent from a year earlier, the Urban Institute found.
Pat O'Donnell is chief executive officer of iPipeline. He joined the organization in November 2023, bringing robust industry knowledge and expertise to the role, including extensive experience in leading and overseeing software company operations, sales, and engineering.
O'Donnell joined iPipeline from Ministry Brands, the leading provider of software and services for faith-based, non-profit, and other purpose-driven organizations, where he led the organization as chief executive officer. In this role, O'Donnell played a key role in the company's success and oversaw a period of transformation and growth.
His experience includes serving as senior vice president, and later as president, of FLEETCOR, an Atlanta-based leading global business payments company.
O'Donnell also held roles of increasing responsibility during his nearly 24 years with ADP, a member of the Fortune 500 and global technology company providing human capital management solutions, including as senior vice president and Division Vice President of Major Accounts.
The tax figures come as Republicans in Washington balk at extending aid to states and cities to help cover budget deficits that are expected to continue as the coronavirus weighs on the economy. Experts say that states’ financial outlooks could worsen as the effects of the stimulus bill fade and high unemployment reduces tax bills next year.
The August increase should be viewed with caution since income-tax deadlines were pushed back to July, which could have resulted in some revenue being processed later, according to Lucy Dadayan, senior research associate with the Urban-Brookings Tax Policy Center at the Urban Institute. Personal income-tax collections, which rose 3.8 percent in August, were in some cases supported by backlogged unemployment insurance benefits subject to withholding tax, Dadayan said.
Between March and August, tax revenues fell 6.4 percent year over year, with 36 states reporting declines over that period, the report said. Between March and August, eight states, including Washington and Georgia, reported growth in tax revenue.
“Due to the shifting in timing of tax receipts this past year, it is crucial to view August year-over-year revenue gains and fiscal year to date data with caution,” Dadayan said in the report.