NCPA - National Center for Policy Analysis


June 11, 2007

The Census Bureau has released data on state and local finances for the 2005 fiscal year, and there are a few findings that tax-happy politicos might prefer to keep under wraps, says the Wall Street Journal.

For example:

  • Total state and local tax collections in the United States were $1.1 trillion in 2005, an increase of 8.5 percent since 2004, or 2.5 times the rate of inflation.
  • New York led the way with a per capita state and local tax burden of $5,770, or 56 percent above the national average and 7 percent above second-place Connecticut.
  • Nationwide, personal income tax collections rose 12 percent in 2005, and sales and property levies were up 6.3 percent and 5.5 percent, respectively.
  • State and local expenditures overall rose by 4.7 percent, with health care and education outlays accounting for much of the increase.

Robert Ward, the Rockefeller Institute's director of fiscal studies, says states can't use the common excuse that more spending was necessary to make up for federal cuts and "mandates" like No Child Left Behind.  "Federal domestic spending has been relatively constant in the last few years, as a share of gross domestic product (GDP)," says Ward. "In other words, the most recent increase in state and local spending is not offsetting net cuts at the federal level."

Source: Editorial, "Flush States," Wall Street Journal, June 11, 2007.

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