Reuters: Regulatory News: U.S. state, local tax revenues continue to rise in Q4 -Census

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U.S. state, local tax revenues continue to rise in Q4 -Census Mar 26th 2013, 16:17 By Lisa Lambert WASHINGTON, March 26 | Tue Mar 26, 2013 12:17pm EDT WASHINGTON, March 26 (Reuters) - Tax revenues of U.S. state and local governments grew for the 13th quarter in a row at the end of 2012, rising 2.7 percent from the fourth quarter of 2011, according to Census data released on Tuesday. Tax revenue totaled $399.7 billion, compared with $389.1 billion in the fourth quarter of 2011. For states alone, the increase was sharper. Their total tax revenue grew 4.9 percent to $193.9 billion in the final quarter of 2012. The fourth-quarter growth, however, could indicate that revenue will drop or only increase mildly in the first quarter of 2013. Because tax cuts passed under former President George W. Bush were set to expire at the end of 2012, many taxpayers sold off investments or made other financial moves in the waning days of the year to avoid potentially steep tax bills in 2013. The burst of income affected states, as individual income taxes provide more than one-third of total state tax revenue. State and local individual income tax revenue shot up 9.4 percent in the fourth quarter from the final quarter of 2011 to $75.7 billion, according to the Census. Of the states that levy individual income taxes, California brought in the highest amount, $14.28 billion, followed by New York's $8.42 billion, and Illinois with $3.43 billion. The 2007-09 recession sent the revenue of almost all states and cities to the lowest levels in more than 30 years. While revenues have now risen for 13 straight quarters, they have only recently returned to pre-recession highs. Most states are putting the finishing touches on budgets for fiscal years that begin on July 1. All except Vermont must balance their budgets and if their revenue comes in below projections used to draft those budgets, they will have to make emergency spending cuts or raise taxes. For local governments, particularly school districts, property taxes provide the bulk of funds. Since the housing crash they have been stuck around the same level, keeping local spending low. In the fourth quarter of 2012, property tax revenue totaled $177.6 billion, "not statistically different from the same quarter 2011 property tax revenue of $177.4 billion," the Census said. Local governments collected 97.7 percent of the property taxes. The Census also found that general sales tax revenue rose 3 percent to $74.3 billion and corporate income tax was up 3.5 percent at $10.2 billion. Not all states charge sales taxes, and the amount of revenue varies geographically. Three states - California, Texas and Florida - brought in $19.2 billion in sales taxes in the quarter, a little less than one-third of the total, the Census said. Link this Share this Digg this Email Reprints

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