Virus hits state revenues
Slide in tax collection could slice into services
As states report tax collections for March and April, none is likely to show year-over-year increases amid the pandemic that shut down businesses.
States are starting to report their tax collections for March and April, and Sen. Mitt Romney, R-Utah, was right when he said, “Blue states aren’t the only ones who are screwed.”
Georgia is showing a decline of more than $100 million in sales tax, fuel tax and other tax revenue compared with the same period a year ago. Tennessee’s tax revenue is down more than $120 million. Pennsylvania’s is off by more than $760 million, and Texas, which also has been hammered by the downturn in oil prices, has seen tax collections plummet by nearly $1 billion.
The total declines compared with last year would be even larger if personal and corporate income tax collections were included. But much of the drop in those categories was the result of postponement of income tax filing dates until July 15.
Georgia, Tennessee, Pennsylvania and Texas are among the first states whose coronavirus-affected tax revenue numbers have been reported. But no state is expected to show year-overyear increases in tax collections in the face of a pandemic that shut down businesses coast to coast and led to unemployment rates not seen since the Great Depression.
“The numbers are going to be bleak everywhere. The only question is how bleak,” said Jack Pitney, a political science professor at Claremont McKenna
College who specializes in studying the Republican Party.
House Speaker Nancy Pelosi has been pushing for stimulus funds to help states and cities address the expected declines. Packages of anywhere from $500 billion to $1 trillion have been bandied about.
On Tuesday, Pelosi unveiled a $915 billion proposal to help states, territories, tribal authorities and local governments. Sen. Jeff Merkley, D-Ore., who sits on the Senate Appropriations Committee, said: “Without this assistance, millions more could lose their jobs, and health care, education and housing services will be cut across the nation.”
One congressman from Pennsylvania tweeted that the bill was “an 1,800+ page liberal wish list.”
“Speaker Pelosi’s bill is a recipe for prolonged recession, with virtually nothing to get the jobless back to work,” said Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee.
But as more states get a handle on March and April tax collections, and the size of the declines starts hitting home, even some Republicans are beginning to change their tune.
In Georgia, for example, the chairs of both the House and Senate appropriations committees have asked the federal government to approve $500 billion in state shortfall aid, according to a letter they sent to members of the state’s congressional delegation May 4.