Most states report strong budgets, but revenue drops from last year
Revenue collection is exceeding predictions in 23 states, a drop from last year when 42 states brought in more money than expected, according to a survey by the Washington-based National Conference of State Legislatures (NCSL) released in December. Another 23 states reported in NCSL’s State Budget Update that revenue collection was on target, while three were collecting less than expected.
Of the 48 states that provided revenue performance information for the survey, most reported that income tax collection was stable. However, the number of states that reported underperforming sales tax revenue doubled this year, up to 14 from last year’s seven. And, although state finances are currently stable and most state officials say they are optimistic about revenue collection for the rest of this fiscal year, many states are worried about a downturn in 2007. “Several states report that tax and revenue issues will top their fiscal agendas in the 2007 legislative session,” says Corina Eckl, NCSL’s director of fiscal affairs and the report’s author. Education and health care are the top concerns.