States See Tax Revenues Stagnating in 2014
A lot of unrepeatable one-time boosts this year
State revenues in 2013 are up 5.3 percent from this time last year, but state officials are worried the gains will dissipate in 2014, according to a new report from the National Conference of State Legislatures.
State revenues in the current fiscal year got a boost from taxpayers who accelerated tax payments on their capital gains to avoid any fallout from the impending "fiscal cliff." These capital gains taxes generated an 18.4 percent rise in personal income tax collections, according to a report from the Rockefeller Institute of Government.
The absence of that revenue wrinkle in fiscal year 2014, coupled with the still tenuous condition of the U.S. economy, is darkening next year's budget forecasts for states. Additionally, the largest spending categories—Medicaid, higher education and corrections—threaten to outpace revenue growth next year, the NCSL report said.