Comparing Virginia on Sources of Revenue
The Tax Foundation released a Fiscal Fact (Fiscal Fact No. 194) this month, which highlights the fact that “states rely differently on property, sales, income and other taxes.” The source data comes from the Census Bureau. According to the Tax Foundation’s senior economist Gerald Prante, "Each of the 50 states' fiscal systems vary widely, and they all rely on various sources of tax revenue due to different endowed resources and policy priorities.”
The report provides four “top ten” tables “highlighting the states that rely heavily on each of four major categories: property taxes, individual income taxes, general and selective sales taxes, and "licenses and other taxes.” For example, New Hampshire (61.3%) relies the most on revenue from property taxes followed by Vermont (42.1%) and New Jersey (41.7%).The state of Washington relies the most on general and selective sales taxes (62.1%) followed by Nevada (58.2%) and Tennessee (56.6%). Oregon relies the most on individual income taxes (44.1%) followed by Maryland (39.7%) and Massachusetts (35.6%).
Virginia relies on individual incomes taxes for 31.6%, but did not rank in the “top ten” of any other category. The other sources of of state and local revenue for Virginia are property taxes (31.0%), general sales tax (14.5%), selective sales tax (11.9%), corporate income taxes (2.7%), and licenses and other taxes (8.3%).
In reporting on the Tax Foundation analysis, Stateline.org writes:
“States that rely too heavily on one tax are vulnerable to revenue fluctuations that can be especially harmful during recessions. In Oregon, for instance, where individual income taxes account for 44.1 percent of total government tax revenue, lawmakers this year were slammed by a huge revenue decline as employment — and personal income — decreased. That has resulted in major spending cuts and is forcing some school districts to resort to four-day weeks.”
The chart that follows is from Stateline.org, and provides readers a helpful way to compare all 50 states and the District of Columbia.
