Idaho, New Mexico and Wyoming stand out – for different reasons – in analysis of tax revenue trends
A new analysis of state tax revenues shows that many states are ahead of projections made before COVID-19 rocked the economy. And some Mountain West states are the nation’s leading performers, while others are struggling to rebound.
From Jan. 1, 2020 through March of 2022, Idaho hauled in 16% more in tax revenue than estimates of what might have been collected without the pandemic. That ranked as the highest gain in the U.S., according to Pew Charitable Trusts.
Idaho has benefitted from boasting the nation’s fastest-growing population and steady job growth over the past two years. Moreover, Idaho approved multiple tax cuts, including a $600 million income tax cut – the largest in state history – that was signed into law in early February 2022.
New Mexico ranked second in tax revenue gains at 15% more than what had been projected, led by rising energy prices. Pew’s Justin Theal, who co-authored the report, said the state’s budget relies heavily on taxes related to oil and gas drilling in the Permian Basin and benefitted from rising oil prices.
Meanwhile, other Mountain West states have yet to see their collections rise above pre-pandemic growth trends.
“Natural resource-dependent states like Wyoming, and those reliant on tourism, like Nevada, have had some of the deepest and longest running declines in tax revenue during the pandemic,” Theal said.
Both states have collected roughly 8% less than estimates made before the pandemic.
Wyoming's one of only two states – the other being North Dakota – that, according to the analysis, "did not take in enough revenue to return to pre-pandemic levels, much less catch up to pre-COVID growth trends."
The rest of the region is on the positive end of the spectrum. Utah’s tax revenue gain was 7.5%, followed by Montana (6.2%), Colorado (3.6%), and Arizona (2.8%).
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.