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.
Aaron Harris has more than 25 years of high-tech engineering experience in business applications and software development strategies. From Sage Intacct's earliest days, Aaron has led the company's product vision and technology direction. A pioneer in cloud computing, Aaron helped Intacct build the world's first cloud architecture delivering on-demand financial applications. He regularly contributes to the development of best practices for cloud computing, service-oriented architecture, platform as a service, and accounting and finance technology standards.
As Sage's Global CTO, Aaron is responsible for Sage's technology and product vision. Aaron is hands-on leading investments in AI/ML, blockchain, and other emerging technologies to transform the way people think and work.
Aaron holds a Master's degree in information systems and a Bachelor of Science in accounting from Brigham Young University.
Christopher D. Maher is the chairman and CEO of OceanFirst Bank in Toms River, New Jersey.
Ian Cohen as CEO & Founder of LOKKER, provider of data privacy and compliance solutions for the enterprise, Ian is dedicated to providing solutions that empower companies to take control of their privacy obligations.
Before founding LOKKER in 2021, Cohen formerly served as CEO for Credit.com, and CPO for Experian, where he focused on consumer-permissioned data.
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.