Rockefeller Institute Reports Sharp Decline in State Tax Revenues

May 15, 2009. The Nelson A. Rockefeller Institute of Government released a report on Wednesday showing that total 2009 first-quarter tax revenue declined in 45 of 47 early-reporting states. The report finds that overall tax revenues across the country declined by 12.6 percent in the first quarter of this year compared with the same quarter of 2008. Due to rising unemployment in every state, personal income tax fell 15.8% from where it was a year ago, accounting for the largest portion of the decrease in total tax revenue. Similar trends in unemployment and decreased revenue are expected in most states in the second and third quarters of 2009. Click here to visit the Rockefeller Institute's website, or click here to view the full report.

Economic trends like the ones identified by the Rockefeller Institute can impact health insurance rates in two competing ways:

• As people lose access to employer sponsored insurance due to job loss, enrollment in Medicaid/SCHIP goes up, as does spending on these programs.

• At the same time, tax revenue decreases cause legislatures to consider budget cuts. Since Medicaid and SCHIP are major components of state budgets, they are often targeted as a potential area for decreased spending, which can lead to reductions in coverage.

Already, at least 19 states have implemented cuts that will affect low-income children's or families' eligibility for health insurance or reduce their access to health care services, according to the Center on Budget and Policy Priorities. Click here to see the Center's update on state budget cuts.

SHARE researchers are currently evaluating various strategies to reduce costs in public health insurance coverage programs while maintaining coverage, access, and quality. For details about current SHARE-funded research projects, click here.