A report from the Census Bureau reveals good news for state governments — overall tax revenues rose 8.9 percent in fiscal 2011 — but it indicates continued struggles for local governments, as the main source of local funding, property taxes, was among the few categories that declined last year. The good news for states, meanwhile, spanned the country, with all 50 states reporting an increase in tax collections, according to The Washington Post.
The Census report looked at tax revenues in the fiscal year that in most states ended last June. The results confirmed a continuing trend of rising tax revenues, particularly for state government coffers. Earlier, the Census Bureau reported that state and local tax revenues combined rose 2.1 percent in the final quarter of 2011, but property taxes rose only 0.2 percent.
State tax revenues increased across the board in fiscal 2011, according to the Census Bureau. Individual income tax revenues, accounting for a third of state tax collections, increased 9.8 percent. Sales tax collection rose 8.3 percent, while severance taxes that states collect on harvesting natural resources like oil and natural gas rose 31.2 percent.
Those numbers contributed to an improving picture for state governments. Nine states recorded tax revenue increases of 10 percent or more in 2011, according to the Census Bureau, while a few states are projecting small budget surpluses. But the good numbers are relative — state finances are looking up only in comparison to lows reached during the worst years of the country’s financial downturn.
The news for local governments continues to be glum. While other revenue increased last year, property tax revenues declined 2.3 percent. The Labor Department reported last week that local governments cut payrolls in March to the lowest level in more than six years, as they struggled to offset the double impact of stagnant property tax revenues and cuts in state aid.