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![handle is hein.taxfoundation/srchxz0001 and id is 1 raw text is: TrAXM
FOUNDATION
January 1994
Number 2 7
State Tax Rates and Collections in 1993
State-level tax and fee collections continued
their decade-long upward trend in Fiscal Year
(FY) 1993, as Figure 1 and Table 5 show. In
fact, the 4.9 percent inflation-adjusted growth
rate from FY 1992 to FY 1993 constitutes the
largest annual increase since 1985.
The record-setting state tax increases enact-
ed in 1991, accompanied by recent economic
growth, explains in large measure the rapid
increase between 1992 and 1993. In fact, state
tax collections grew 3.7 percentage points
(or 1.7 times) faster than personal income.
In comparison, state tax collections grew at an
Figure 1
State Tax Collections 1983-199.3, Current and Constant (1983) Dollars
$400
$350
$300
$250
_
o $200
SOI'CCi Tax FotLILdation.
inflation-adjusted annual average of 1 .1 percentage
point (or 1.4 times) faster than personal income
between 1983 and 1993. (See Table 7.)
As Table 7 shows, between 1983 and 1993
the experience of different states varied
dramatically. It also shows that between 1992
and 1993 Alaska (a special case because of oil
drilling), Mississippi, Colorado, North Dakota,
and Tennessee had the highest tax growth
relative to personal income growth. In contrast,
Nebraska, Idaho, Pennsylvania, West Virginia
and Montana constitute the top five states
where personal income grew faster than state
taxation. (If Washington, D.C., were a state, it
would rank third, above Pennsylvania.)
Table 6 shows the FY 1993 state by state
tax collections that underlie the tax growth
rates. It also ranks the total tax burden per
household for each state, and-with Figure 2-
shows the distribution by type of tax of the
total tax collections for each state and the U.S.
Trend in State Tax Collections
Table 5 provides a 10-year snapshot of
state tax collections and indicates what areas
of state taxation grew most rapidly nationwide.
Tax collections in the following categories
grew significantly above their historic trend:
the miscellaneous categories compiled under
the heading other, property taxes, severance
taxes, the corporate income tax, and public
utility taxes. Licenses, like those required to
operate a business or register a motor vehicle,
have also grown markedly since FY 1991. In
contrast, collections from insurance-premium
taxes, tobacco taxes, and motor fuel taxes
grew markedly below their historic trend.
The 178.6 percent increase in the category
called other is noteworthy because many
new state taxes inadvertently fall into this
classification. Other contains miscellaneous
1By Arthur Hall
Senior Iconomnist
lax Foundation
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