Fear of federal taxes pushes state collections up

Investors also take profits after strong year in the market
APR 09, 2014
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

SEC fines Zoe Financial $450K over undisclosed referral conflict
SEC fines Zoe Financial $450K over undisclosed referral conflict

Salespeople at the firm often went beyond the matching algorithm to recommend network advisors on its Zoe Wealth platform, according to the regulator.

Senate vote on NIL bill could reshape college athletes' paydays
Senate vote on NIL bill could reshape college athletes' paydays

The Protect College Sports Act would cap school payments and codify NIL rights, with implications for advisors guiding young athletes.

'I'm done': Pandemic memories push business owners toward the exit
'I'm done': Pandemic memories push business owners toward the exit

"I know the number that I want to be able to retire on, and now I just want out," says Wilmington Trust's Marguerite Weese, describing a common refrain among business-owner clients.

Northern Trust bulks up family office team with New York hires
Northern Trust bulks up family office team with New York hires

Bessemer and Brown Brothers Harriman veteran Robert Ludricks III and private markets specialist Olof Akesson join the ultra-high-net-worth push on the East Coast.

SEC accuses trucking operator of running $127 million Ponzi scheme
SEC accuses trucking operator of running $127 million Ponzi scheme

765 investors were promised 260% annual returns on truck leases

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains