In May the U.S. Census Bureau released state and local financial data for fiscal year 2005. This is the data that most analysts use to allow meaningful comparisons of between states (in contrast to the data that comes from the Tax Foundation and other groups with an ideological bias). We will write more about the census data later this summer, but recently Federal Funds Information for States issued a brief report comparing revenue generation at the state level. I thought it might be useful to share this data now.

The U.S. Census looks at 3 broad categories of revenue: total, general and own-source. Total revenue includes any money that state and local governments collect for any purpose. The Census then subtracts revenue that is generated by quasi-private services (e.g. liquor stores, utility, insurance) to arrive at an amount of general revenue. The Census then subtracts revenue that comes from the federal government (intergovernmental revenue) to calculate the state and local government own-source revenue.

Here are some of the rankings:

· 21/50 State and Local Revenue Generate Per Capita (Below U.S. Average)
· 24/50 State and Local Government Intergovernmental Revenue Per Capita (Above U.S. Average)
· 28/50 Intergovernmental Revenue as a Percentage of State and Local General Revenue (Above U.S. Average)
· 22/50 State and Local Own-Source General Revenue Per Capita (Below U.S. Average)
· 16/50 State and Local Own-Source General Revenue as a Percent of Personal Income (Above U.S. Average)
· 39/50 Percent of State and Local Tax Collections by State Government (Below U.S. Average)

There are numerous reasons for why states rank they way they do, many of them historical. For example one of the reasons that Ohio ranks 39 out of 50 in terms of state and local tax collections by state government is that the state allows local governments to levy a larger variety of taxes than other states. If Ohio’s personal income rankings continue to fall further below national averages we will likely see our state and local own-source general revenue as a percent of personal income ranking rise higher above the national average. That’s because wealthier states can generate more revenue with relatively low tax rates. At the same time if Ohio’s population continues to drop it will drive up our per-capita rankings (e.g. less people to share the overall tax burden).