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* US Department of Commerce…
Advance estimates of U.S. retail and food services sales for March 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $483.1 billion, a decrease of 8.7 percent (±0.4 percent) from the previous month, and 6.2 percent (±0.7 percent) below March 2019.
* The NY Times reports that this is by far the biggest decline in three decades of government record-keeping…
And that’s just March. April is likely gonna be worse.
* From Mark Robyn, senior officer for state fiscal health at The Pew Charitable Trusts…
The sharp drop in retail spending we saw this morning poses significant challenges for state budgets. General sales taxes raise nearly a third of all state tax revenues nationally, and are the largest tax revenue source in 15 of the 45 states that collect them. They are particularly crucial for six states where they accounted for more than half of all tax collections (as of fiscal 2018): Florida, Nevada, South Dakota, Tennessee, Texas, and Washington.
Furthermore, this morning’s retail sales data illustrates how different this economic downturn is from past recessions. Historically, sales taxes have provided a relatively stable source of tax revenue for states, helping to smooth out the ups and downs from taxing more volatile economic activity such as capital gains, corporate income, or oil extraction. For the last two decades, they have been a more stable source of revenue than personal or corporate income, severance, and property taxes in all but four states where they are levied. Today’s drop in retail spending illustrates one more way the pandemic poses a new challenge for state leaders attempting to stabilize their budgets.
About 34 percent of the money collected by the Illinois Department of Revenue comes from sales taxes.
posted by Rich Miller
Wednesday, Apr 15, 20 @ 11:23 am
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Previous Post: About those Tillman op-eds
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Now this is a real indicator of economic activity.
Comment by Ok Wednesday, Apr 15, 20 @ 11:24 am
I don’t see how April won’t be significantly worse. Between the reality of massive unemployment and the hoarding that happened over the last two weeks of March, April sales will be awful. Now isn’t the time to focus on what this does to the budget, but it will be soon.
Comment by SSL Wednesday, Apr 15, 20 @ 11:35 am
Landscaping is deemed an essential business in Illinois, but I won’t be paying sales tax on my lawn aeration.
Many when all this is over, someone will realize broadening the sales tax base is a form of revenue risk mitigation.
Comment by City Zen Wednesday, Apr 15, 20 @ 11:36 am
The real angst will be when it’s time to pony up property taxes.
Comment by Blue Dog Dem Wednesday, Apr 15, 20 @ 11:45 am
Cool, cool.
Just gotta make it to May 1. Then, back to normal.
Comment by Moe Berg Wednesday, Apr 15, 20 @ 11:53 am
From the GOP open letter:
“A piecemeal approach is not what we or other legislators are proposing. Instead, we propose a uniform policy for the State of Illinois that will empower county health officials to make decisions on closures.”
County level decisions about shut downs or social distancing is the definition of piecemeal. The virus doesn’t care what lines we humans have drawn on a map.
Comment by Perrid Wednesday, Apr 15, 20 @ 1:29 pm
Oops, the post above was to another thread.
Comment by Perrid Wednesday, Apr 15, 20 @ 1:30 pm