Fiscal stress continues, with growing financial uncertainty on the horizon.

Position:News & Numbers
 
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State tax revenues declined in 19 states, leaving fiscal holes in state budgets, according to a report from the Rockefeller Institute of Government report, which also found that state and local government tax revenues continue to grow at an extremely slow pace. Specifically, the report finds that:

* State and local government revenue from major taxes increased 2.3 percent in the fourth quarter of 2016 compared to a year earlier, which is slightly slower than the 2.5 percent average growth for the four previous quarters.

* Local governments as a group rely heavily on property taxes, which are relatively stable but weakened somewhat in the fourth quarter, growing by 4.0 percent, compared with a 5.1 percent average in the prior four quarters.

* Total state government tax revenue from all sources grew 1.4 percent. This continues the weakness seen in recent quarters. It is slower than the 1.8 percent growth of the third quarter, and is slightly negative after adjusting for inflation.

The weakness was the result of soft growth in personal income taxes and modest growth in state sales tax revenue collections. All major state tax revenue sources grew, except the corporate income tax, which declined 2.5 percent. Individual income tax collections grew 0.3 percent, while sales tax and motor fuel tax collections grew 1.7 and 0.9...

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