State Errors in Estimating Revenue Growing Worse With Increasing Dependence on Personal Income Tax

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

State errors in revenue forecasting have increased significantly in the past decade, largely because of an increasing dependency on more volatile sources of revenue, according to a recent study by the Pew Center on the States and the Rockefeller Institute of Government. At the same time, state revenue streams have grown more sensitive to economic cycles, meaning that revenue estimators will find it increasingly harder to predict revenue performance in the future.

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