State and local tax revenue on the rise

@CNNMoney June 28, 2011: 2:58 PM ET
State and local tax revenue is on the upswing.

State and local tax revenue is on the upswing.

NEW YORK (CNNMoney) -- First the good news: State and local tax revenues climbed 4.7% in the first quarter, fueled by a surge in personal income taxes.

Now the bad news: Property tax revenues fell 1.7%, the second straight quarter of declines. This does not bode well for local governments that depend on property taxes to fund operations.

The new Census Bureau data, released Tuesday, shows that things are looking up for state governments. Revenues have increased for six consecutive quarters, thanks to the recovering economy and stock market, as well as tax increases, according to IHS Global Insight. But income and sales tax collections remain 1.5% below their 2008 peak.

Individual income taxes gained the most, up 11.9% compared to the same period a year ago. Sales taxes jumped 5.8%.

Several states are depending on higher tax revenues to balance their budgets. California Governor Jerry Brown and legislative leaders on Monday released a budget proposal that hinges on the Golden State bringing in $4 billion more in revenue in the coming fiscal year.

States' latest problem: Too much money

Municipalities, however, are still suffering from the economic downturn, particularly the collapse of the housing market. That's because it takes several years for property tax assessments to adjust, so the drop in home values is only showing up now.

"With property tax revenues representing a predominant share of local revenues, the foreseeable future looks grim for local governments as their tax base will continue to shrink because of falling property values," said Gregory Daco, principal U.S. economist with IHS Global Insight.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.94%3.93%
15 yr fixed3.03%3.03%
5/1 ARM3.33%3.27%
30 yr refi4.02%3.99%
15 yr refi3.09%3.07%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
CNNMoney Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.