Maureen Groppe reports that Indiana’s tax revenues are at their lowest levels since 2006. Revenues were 7% lower in 2010 than in 2009. The average among all states was only 2%. The decline in income tax payments is the primary reason. Indiana ranks 30th in tax revenue per capita.
One of the main downsides is that we have been moving away from property taxes and toward income and sales taxes to finance state and local government. Income tax, as we can see, is a volatile funding source; and our governments — particularly local government, I think — stands to get a kind of budgetary whiplash from the dramatic shifts in funding availability.
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