Via the Rockefeller Institute of Government, an independent research firm focusing on state and local governments, we get some nasty data and fugly charts.

The overview paints a picture of state and local governments in economic distress:

• State tax collections for the second quarter of 2009 showed a record drop of 16.6%, the second consecutive quarter in which revenues fell more sharply than during any previous time on record. • Forty-nine states saw total tax revenue fall during the quarter,

with 36 states reporting double-digit declines. Both those numbers were up from the first quarter of this year. • For the year ending in June 2009, the period corresponding to most states’ fiscal years, total state tax collections declined by $63 billion or 8.2% from the previous year. That loss is also a record, and is roughly twice the amount states gained during the year in fiscal relief from the federal stimulus package. • Preliminary figures for July and August for 36 early-reporting states show continued deterioration, with overall tax collections dropping 8%. Early indications of September income tax payments provide further evidence of more troubling news for states during the third quarter of 2009. • Local tax revenue declined by 2.8% in nominal terms and 4.2% in real terms, marking the first such decline since 2003.

This data is to be expected in a deep and protracted recession. Job loss and retail sales slowdown directly reduces tax revenue. That is the nasty; Now, for the fugly:

Both Income Tax and Sales Tax Declined Sharply

State Taxes Are Faring Worse Than Local Taxes

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Source:

State Tax Revenues Show Record Drop, For Second Consecutive Quarter

Lucy Dadayan and Donald J. Boyd

The Nelson A. Rockefeller Institute of Government

http://www.rockinst.org/pdf/government_finance/state_revenue_report/2009-10-15-SRR_77.pdf