Fear of federal taxes pushes state collections up

Investors also take profits after strong year in the market
APR 09, 2014
By  lkonish
U.S. states took in 6.1 percent more revenue in fiscal 2013 than they did the year before for a record $846.2 billion, according to the Census Bureau. It was the third consecutive increase, the agency said in a statement today. Revenue rose 4.7 percent from 2011 to 2012, and 7.3 percent from 2010 to 2011. The data show states' financial improvement after the 18-month recession that ended in 2009. The figures reflect higher income-tax collections resulting from strong financial markets and an incentive for taxpayers to take profits before higher federal tax rates began, said Donald Boyd, a senior fellow at the Albany, New York-based Nelson A. Rockefeller Institute of Government, which conducts public policy research. “The financial markets and the federal government, in an unintentional way, were very good to states in 2013,” Mr. Boyd said. “States benefited from a surge in income-tax collections that had very little to do with the overall economy.” Revenue increased in all states except Alaska and Wyoming, where tax receipts from natural resources declined, according to the Census Bureau. States with the largest percentage increases were North Dakota, California, Hawaii and Colorado. INCOME LEVIES Collections on individual income levies rose 10.3 percent to $309.6 billion in 2013, and sales taxes increased 3.9 percent to $254.7 billion, according to the Census Bureau. Mr. Boyd said the recovering economy would help states in the long term. “We'd expect continued increases in tax collections, just not as robust,” Mr. Boyd said. The turnaround comes two years after 31 states faced collective deficits of $55 billion, according to the Center on Budget and Policy Priorities, a Washington-based research group that examines the effects of fiscal policies on low-income Americans. State securities this year are earning 2.7 percent, lagging behind the $3.7 trillion market's return of 3.8 percent, according to S&P indexes. (Bloomberg News)

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave