Smoothing state tax revenues over the business cycle: gauging fiscal needs and opportunities

Yolanda Kodrzycki

No 14-11, Working Papers from Federal Reserve Bank of Boston

Abstract: During the two most recent U.S. recessions in 2001 and in 2007?2009, state governments experienced an unusually high degree of fiscal stress due to increased revenue cyclicality. Expanding upon the aggregate evidence, this paper explores the degree to which individual states have experienced fluctuating tax receipts over the business cycle. The findings provide state policymakers with information to better understand the extent and causes of this tax revenue cyclicality and, in the context of balanced budget requirements, the efficacy of alternative measures that might be employed to smooth the sensitivity of state resources to economic conditions.

Keywords: state tax policy; revenue cyclicality; tax volatility; individual income tax (search for similar items in EconPapers)
JEL-codes: H2 H7 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-10-30
New Economics Papers: this item is included in nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.bostonfed.org/economic/wp/wp2014/wp1411.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:14-11

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().