NCPA - National Center for Policy Analysis


June 25, 2010

Lagging employment numbers from the "great recession" are still haunting some state revenue sources, according to a report from the Nelson A. Rockefeller Institute of Government.  In other words, after experiencing revenue declines in 2009, the recession is still not over for most state and local governments, says the Heartland Institute. 

Rockefeller Institute fiscal experts predicted states would face such a decline in their last State Revenue Report, released April 16: 

  • The report shows states have already suffered revenue drops for a record five quarters.
  • The declines are expected to continue, at least in the near term, as the national unemployment rate remains stubbornly high, at 9.9 percent in April, according to the Bureau of Labor Statistics.
  • Some 45 states experienced declining tax collections in 2009, with 16 suffering double-digit percent declines, according to a recent Census data study by the Tax Foundation.
  • Overall, state tax revenues fell by 8.9 percent in 2009. 

For example, in California: 

  • California State Controller John Chiang (D) documented a huge drop in state tax revenues in his recently released report on California's cash balance, receipts and disbursements.
  • The month's receipts dropped below Gov. Arnold Schwarzenegger's 2010-2011 budget estimates by $3.6 billion, or 26.4 percent.
  • Four months of positive receipts were erased in the last 10 days of April. 

Illinois is likewise nearing insolvency: 

  • The state legislature adjourned in May without passing a new state budget for the fiscal year beginning July 1.
  • According to State Comptroller Daniel W. Hynes, the level of unpaid obligations stands at $4.4 billion and will continue to grow.
  • The state has borrowed $2.25 billion that must be paid back within the next six months. 

Source: John W. Skorburg, "Economic Recovery Still Eluding State Coffers," Heartland Institute, July 2010. 

For  Nelson A. Rockefeller Institute of Government's state revenue reports:  

For California Controller Office's General Fund Cash Receipts reports: 


Browse more articles on Tax and Spending Issues