Government tax revenues on the rise
State and local government tax revenue in the final quarter of 2011 rose to a 23-year high, the Census Bureau reported March 22. Tax revenues were at the highest level for one quarter since the Census Bureau began tracking state and local tax data in 1988, according to Reuters.
Tax revenues in the fourth quarter last year rose 2.1 percent from the fourth quarter of 2010, the ninth consecutive quarter of positive year-over-year growth, the Census Bureau said. State and local revenue for the quarter totaled $387.2 billion, compared to $379 billion for the fourth quarter of 2010.
Tax revenues were stronger throughout 2011, totaling a record $1.35 trillion, 4.5 percent higher than in 2010. That surpassed the $1.3 trillion in tax revenues in 2008, before the recession’s effects hit state and local governments hard in 2009, causing revenues to plummet to 20-year lows.
In the fourth quarter last year, tax revenues for state and local governments increased across the board, the Census Bureau said, with property taxes, general sales taxes and individual income taxes all recording positive growth. Property taxes grew 0.2 percent to $177.2 billion from $176.8 billion in the last quarter of 2010.
The increased tax revenues are among continuing signs of an improving economy. Unemployment rates have dropped in many states, and the U.S. economy created almost 2 million new jobs last year, according to a study by Arizona State University.
But state and local officials worry that any new downturn could threaten budgets already stretched thin by cuts made during the height of the financial crisis. Local governments are particularly vulnerable because they rely largely on property tax revenue, which is still affected by the collapse of the housing market.