Journal Article

Riding the revenue roller coaster: recent trends in state government finance

Abstract: The fall in state tax revenue during the current recession and the one in 2001 highlights an increase in the variability of this source of revenue that has been observed over the past two decades or so. But states have sources of revenue other than taxes. However, while providing a relatively constant portion of total revenue over the past several years, these sources have generally not damped variability in state revenue arising from variability in taxes. Consequently, variation in state tax revenue remains an important issue for state government finances. In this article, Tim Schiller looks at the causes of the increased variation in state tax revenue during recent business cycles compared with earlier ones. He also reviews strategies for coping with fluctuations in state tax collections.

Keywords: state finances; Taxation; Revenue;

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Business Review

Publication Date: 2010

Issue: Q1

Pages: 23-30