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.
Pegine Grayson, JD, CAP, is a senior vice president and director of Whittier Trust's Philanthropic Services department, leading a team of 14 in providing philanthropic advice to the company's high net worth clients and management services for their foundations and donor-advised funds.
Grayson advises clients on issues such as formalizing their philanthropy, charitable giving strategies, impactful grant-making and involving the next generation in philanthropic activities. She and her team also provide turn-key, comprehensive foundation and DAF management services, shouldering all the administrative responsibilities, so clients can simply experience the joy of giving and the positive impact it has on their families.
Grayson received her law degree from the University of Southern California Law School, her chartered advisor in philanthropy designation from The American College, and her bachelor's degree from Middlebury College. She is also trained as a mediator through the Los Angeles County Bar Association.
Peter Spiegel is the founder and CEO of Ideal Living, a company whose mission is to ensure everyone has access to affordable clean air and pure water, and a solid foundation for wellness. Peter is a pioneer in direct-to-consumer marketing and an avid wellness advocate. His innovative wellness products — that include AirDoctor, AquaTru and AromaTru — have over $3 billion in sales, and have become best sellers in major retailers, such as Walmart, Target and Costco.
Ted McRae is the director of marketing at MakersHub.ai.
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.