Pew/Rockefeller-States’ Revenue Estimating: Cracks in the Crystal Ball

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This report studies revenue estimating errors made by states during economic downturns. The Pew Center on the States and The Nelson A. Rockefeller Institute of Government collaborated to conduct an analysis of 23 years of data on personal income, sales and corporate income tax estimates and collections. The results show that the states regularly misestimate revenue and that those errors are significantly greater during a recession. The long-term trend is that overestimates have gotten larger during each of the past three economic downturns, and more states have made them. This report discusses the causes of this trend and describes practices some states have adopted to achieve greater precision.

Resource Details

Date: Mar 2011
Author: Susan K. Urahn and Thomas Gais