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.
Jen Leary is chief executive officer of CLA (CliftonLarsonAllen LLP). She leads CLA's firmwide strategic efforts to fulfill the CLA Promise and its purpose — to create opportunities for its clients, people and communities. In addition to supporting various advisory councils within the firm, she is a member of the CLA Board of Directors, the CLA Wealth Advisory Board of Directors, the newly formed CLA Global Board of Directors and leads the firm's senior leadership team. She has been serving clients for over 20 years in the United States and Europe. Her background includes assurance, consulting, mergers and acquisitions and global advisory services. She has previously served the firm in various roles such as chief strategy officer, client service leader and managing partner of the various geographies before taking on the role of CEO in January 2021.
Ilan joined Sapiens in February 2022 and brings a wealth of leadership experience at the forefront of technology and innovation, with such companies as NAYAX, Amdocs and Bank Leumi. Ilan is responsible for developing a coherent view across Sapiens' product offering, leading the company's journey to cloud, reinforcing Sapiens' technology roadmap and digital offering. Ilan also leads all aspects of IT, cyber and information systems, to accelerate the company's business growth.
Kate Krupey is vice president of accounting at Netgain Technology LLC, which provides secure cloud-based infrastructure to optimize and support CPA business applications. A former CPA firm CIO, Kate has over 20 years of experience in both optimizing and transforming IT for accounting firms, professional services firms, startups, and public sector companies.
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.