Revenue

Surprising many in the state, state Senator Rollie Heath delivered more than 142,000 signatures to the secretary of state's office in support of a ballot initiative that would increase taxes to raise over $3 billion for education.  Sen. Heath, who authored the initiative, announced the petition drive in May, and claims to have personally obtained more than 1,000 signatures.

Since 1935, The Book of the States has been the resource for state information for state leaders. Today—perhaps more than ever—access to up-to-date and reliable data and information is a key ingredient to developing successful state strategies and evidence-based solutions to the tough challenges policy leaders face.

Now, policymakers have a new tool: The Book of the States Regional Analysis Series.

Nearly every state saw an increase in real gross domestic product1 in 2010—a welcome sign of economic recovery after two straight years of drops in the national average. Each region performed differently, with a few states posting impressive 4-plus percent gains and a majority of states falling between 1.5 and 3.5 percent.

State governments play an important role in national and regional economic conditions and are subject to prevailing economic conditions. The Census Bureau’s official statistics provide a full picture of the early impact of the most recent recession from tax revenues to expenditures to employment.

The state fiscal environment remains very weak despite the turnaround in revenue growth. It  will be at least several years before many states see revenues return to their previous peak levels and several years more before revenues reach similar proportions of the economy. Though states may be less inclined to seek the tax rate increases that occurred after previous recessions, many are examining ways to tax cross-border activity more effectively.

The 2010 fiscal year was another difficult year for states. State revenue collections continued to fall, while general fund spending declined for the second year in a row, marking the first time state spending has declined in back-to-back years. Additionally, 39 states were forced to make midyear budget cuts. Fiscal conditions have improved somewhat for states thus far in the 2011 fiscal year. The number of states making budget cuts has declined and both revenue collections and spending have grown. However, states remain well below pre-recession levels even with the recent increases. States will have to continue to make difficult decisions in the 2012 fiscal year and beyond as Recovery Act funds wind down, spending demands remain high and revenues are slow to recover.

Chapter 7 of the 2011 Book of the States contains the following articles and tables:

How should states react to the exponential growth in e-commerce transactions that largely occur without the collection of sales taxes? As states struggle to deal with the sharp drop-off in revenues caused by the Great Recession, the issues related to collecting sales taxes on e-commerce transactions continues to roil state policymakers across the country.

On April 27, 2011, the South Carolina House of Representatives, by a vote of 71-47, defeated an amendment that would have provided a five-year sales tax exemption to Amazon.com  in exchange for the company building a distribution center in Lexington County, in the central part of the state. While this vote resulted in Amazon canceling plans to proceed with an operation in South Carolina, it also raised to the forefront a burning issue confronting state policymakers: how should states react to the exponential growth in e-commerce transactions that largely occur without the collection of invaluable sales taxes? As states struggle to deal with the sharp drop-off in revenues caused by the Great Recession, the panoply of issues related to collecting sales taxes on e-commerce transactions continues to roil state policymakers across the country.

I must admit that when I first heard about state-based online lotteries I thought, “Okay…so do I just keep moving the mouse back and forth to scratch the virtual ticket?” Alas, I was mistaken – though that would be cool.

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