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.
Jim Albertelli is the CEO of Voxtur
For more than 20 years, Stephanie has brought her passion for employee wellness to industries of all sizes. Her attention to aligning mental and physical health brought forth a much-needed alignment of wellness and Employee Assistance Program (EAP) services for the clients she has served. She combines fourteen years of EAP experience with a background in Human Resources, coaching and wellness program operations.
Stephanie is a Duquesne University graduate with a Bachelor of Science in Organization Behavior and Leadership, she holds a certificate in Human Resources Management from Robert Morris University and holds a number of wellness certifications, including a Holistic Fitness Specialist and Lifestyle Wellness Coaching certification from NETA and Certified Corporate Wellness Coach (CCWC) from The Spencer Institute. Stephanie has conducted hundreds of speaking engagements and presently serves as the Director of Wellness for AllOne Health.
Michele Harbaugh has been a human resource professional for more than 20 years and currently manages health and benefits for Yoga Joint, which operates eight yoga studios across South Florida. Michele's professional dream is for employees to see human resources as a tool for them, not the dreaded "principal's office". She does this through actively engaging the team, having open and honest conversations, and interpreting policies into everyday language. She is on a mission to put the human back in human resources, help employees thrive at their workplace, and contribute to the company's overall growth.
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.