Total state tax collections approached nearly $800 billion in fiscal year 2012, a record-high that finally surpassed pre-recession levels.
A Census Bureau survey of state governments published Thursday showed many states, particularly those benefiting from natural resources, saw a noticeable uptick in tax collections. In all, 23 states recorded increases exceeding 5 percent for the fiscal year, which for most states ended in June.
The $34.3 billion total annual growth amounts to about half the increase that occurred between 2010 and 2011, when revenues jumped as states slowly exited the recession. Still, data indicates many states have come a long way in rebounding from lows in recent years. The $794.6 billion collected in fiscal 2012 represents about a 13 percent increase from 2010 totals, which are not adjusted for inflation.
Individual income taxes – the largest single source of most states’ revenue - increased 8.1 percent from fiscal 2011. General sales tax collections rose $6.8 billion, a 2.9 increase. The only revenue categories the Census Bureau measured that declined for the year were property taxes and taxes tied to gifts and inheritance.
For the second consecutive year, North Dakota recorded the highest annual percentage increase in total tax revenues, up a staggering 47 percent. Alaska, another state reaping the benefits of its natural resources, saw its total revenues swell 27 percent, mostly driven by a $1.5 billion jump in severance taxes stemming from oil drilling.
Illinois filled its coffers with an additional $5.8 billion over the fiscal year, the highest increase of any state in terms of raw totals. Money from individual income taxes, up 8.1 percent, accounted for much of the state’s added revenue. Illinois’ personal income tax rate was hiked from 3 to 5 percent and its corporate income tax rate increased from 4.8 percent to 7 percent in 2011.
Behind Illinois, the states experiencing the top revenue gains were Texas ($5.5 billion), New York ($3.6 billion) and Connecticut ($2 billion).
Changes to tax rates and other policy changes explain fluctuations in some states’ collections, along with varying economic climates.
Only three states saw their tax revenues dip.
Collections were down 3.7 percent in California, which took in the most of any state. New Hampshire and Wisconsin also reported year-over-year declines.