Tax Revenues – Pennsylvania Is Hurting
As is many other states across the country. A topic I have spoken of on a number of occasions is the declining tax revenues that will continue to suffer and will lead to the next wave of unemployment (spoiler alert – this is a topic in my 2010 predictions).
Consider the following from the Pittsburg Times
Pennsylvania state tax revenue fell in comparison to last year, largely due to its residents earning and spending less, according to third-quarter data released Tuesday by the U.S. Census Bureau.
The Quarterly Summary of State and Local Tax Revenue reported Pennsylvania had third-quarter tax revenue of $6.64 billion, down 6 percent from $7.09 billion in the third quarter of 2008. Year-to-date, Pennsylvania tax revenue totaled $23.08 billion in 2009, down 9 percent from $25.24 billion in 2008.
A vast majority of the drop can be attributed to Pennsylvania residents making less money and, in turn, spending less. The two largest classifications of taxes — general sales and gross receipts, (which declined 7 percent for the quarter and year-over-year), and individual income tax revenue, (which declined 9 percent from the quarter and 14 percent year-over-year), account for three-quarters of the drop in state tax revenue. The drop in general sales and gross receipts for the first three quarters of the year totaled $475 million, and the drop in individual income tax revenue totaled $1.15 billion.
Corporate net income tax revenue was down 11 percent in the quarter and 22 percent year-over-year. This tax brought in about $347 million in the third quarter of 2009, down from $390 million in the prior year quarter. Year-to-date, the tax brought in $1.33 billion in 2009 compared to $1.7 billion in 2008.
The category of corporations in general brought in about $69.4 million in the third quarter, down 58 percent from $164 million in the prior year quarter. For the year, this category brought in $433 million through three quarters of 2009, down 33 percent from the $646 million the tax delivered in the first three quarters of 2008. [...]
[...]Other than revenue from licenses, few categories brought in more tax revenue in 2009 than in 2008. One exception was alcoholic beverage tax revenue, which was up 12 percent in the quarter and 9 percent year-over-year. [...]
Watch for 2010 to include more layoffs from local, county, and state government agencies and departments. There will be one of two ways to correct the significant decline in tax revenues going forward. Increase taxes or layoff more workers. Either one is a blow to the economy.
You see, the green shoots that so many were calling as signs of sustainable growth did not turn out to be perennials, instead they were just short term annuals, and many of them have already died off.
I live in northeast PA. Every aspect of living, from gas to utilities to school/property taxes keeps going up. Yet the Federal government says price stability (especially gasoline) is why I am not getting a cost of living raise in Social Security. Meanwhile the cap is coming off the electric company any day now. Gov. Rendell admitted the higher taxes are to pay for state raises and pensions these guys gave themselves at my expense. Nor has the legislature doing anything to cushion the blow of an electric bill that could go up by a minimum of 40%. If sales taxes revenues are going down it’s because no one has any money left–not to mention food inflation. The effing packagers keep the price the same but make bags 25% smaller. Last month a jar of marshmallow creme nearly doubled in price. No great necessity for me; I’ll just stop buying it. But if this is an omen, and food gets too expensive, get ready for rioting in the streets.