by Calculated Risk on 5/01/2008 06:33:00 PM

From the Rockefeller Institute of Government: Sales Tax Collections Decline in Most States, Rockefeller Institute Survey Finds

State sales tax revenues delivered the weakest performance in six years during the first quarter of 2008, while growth in overall state tax revenues continued to deteriorate, according to preliminary data in a new report by the Rockefeller Institute of Government.

Click on map for larger image.

Map Source: Rockefeller Institute Report.

With 36 of the 45 states that collect sales tax reporting, revenue from sales taxes declined both nationwide and in 21 states during January to March 2008, compared to the same period a year earlier. Southeastern states were hit the hardest: nine of the 21 states reporting sales tax declines were in that region. When adjusted for inflation, sales tax revenues declined in at least 27 states. For the states reporting so far, the overall level of sales tax collections fell slightly – the first time such revenues have not grown in six years.

“The widespread declines in the sales tax are a leading indicator of economic weakening, and a harbinger of further state budget troubles,” said Rockefeller Institute Senior Fellow Don Boyd, co-author of the study. “While the last recession hit states hard via a collapsing income tax, weak consumer spending and declining sales taxes may play a greater role this time around.”