How states estimate revenue

PEW CENTER ON THE STATES INFOGRAPHIC How states estimate revenue STATES: Purchase NATIONAL DATA personal incor gross national pro forecasts of key foreign trade national Confidence Inflatio interest rates economic consumer data levels Develop forecasts STATE FORECAST 3,683,7 4,409 6,925 for their 1,275,349,668 4,409 own state's economic 2,425,887 6,442,126,516 performance WASHINGTON Feed the REVENUE ESTIMATE economic data into For Washington State, a model that consumer confidence levels influence the predicts the amount of sales tax state's revenue the state is predicted to collect, whlle forelgn trade could, for example, impact business and occupation (gross recelpts) tax collections. Estimate uses revenues tax rates and historical performance of the tax over time. UNPREDICTABILITY Washington State has lowered its forecasts twice in the past year, due to circumstances completely beyond According to the state's economist, the Japanese tsunami and earthquake, along with Middle-East political tensions, caused supply chaln disruptions that have slowed recovery. A weakening economic outlook and the extended debt celling negotlations contributed to a draln In consumer confidence, leading to a reduction in sales its control. tax revenue. The state's March and September estimates saw revenues come in below the forecast. 1.4 The state has now reduced the amount of general fund revenues it expected by $1.4 blllon over a two-year perlod. BILLION Pew Center on the States, 2011