Two out of every three states in America took in less tax revenue than expected this year, the worst performance since the depths of the recession, and twenty states expect to address budget shortfalls in the coming year.
The new data, contained in three reports released by state budget analysts this week, raise concerns that states could face a new round of belt-tightening — and that another economic slowdown could be just around the corner.
The reports cite a variety of factors behind the revenue slowdowns, from falling commodity prices to the rising costs of government services. Some of the slowdown also likely comes from wealthy taxpayers and corporations, which have delayed some tax payments until next year in hopes that tax reform proposals will pass Congress.
Thirty-three states will miss revenue projections in Fiscal Year 2017,according to the National Association of State Budget Officers. That’s the highest number of states to miss revenue targets since 2010, during the middle of the recession, when 36 states missed projections.
In total, states anticipate revenues falling short by $12 billion. Most of the shortfall comes from sales tax collections, which are projected to be down $6.6 billion. That troubles some economists because sales taxes are traditionally the most stable revenue sources for states.