Nearly half the states have seen no real growth in revenue this year, indicating they are in recession or close to it, according to a study of state finances released yesterday.
The impact was cushioned by a big round of tax increases last year, and even more are likely next year, the author of the study said.
"The pressure is building on states to raise taxes next year," said Steven D. Gold, director for the Center for the Study of the States at the Nelson Rockefeller Institute of Government at Albany, N.Y.
"If you see a state that has lower revenue this year than last year, you know they're under tremendous pressure and there's a good bet they'll have to raise taxes next year," he said.
The report was issued by the center, which is part of the State University of New York at Albany.
It said that in a survey of revenue collections in 43 states, 23 reported total tax revenue increases equal to or below the inflation rate -- meaning no increases after adjustment for inflation.
The figure was in line with a Labor Department report Friday showing unemployment shot up to 5.5 percent last month and the economy grew by just 1.2 percent in the second quarter, below the level needed to create new jobs.
The conclusion that many state economies are in or near recession is consistent with a report from the National Governors Association and the National Association of State Budget Officers in April that states were in worse financial condition than a year ago.
The new study said corporate income tax collections were the weakest component of the state revenue picture, with a 6.7 percent decline, reflecting a drop in earnings.
The two other principal revenue sources -- the sales tax and personal income tax -- posted overall gains of 6.6 percent and 7 percent, respectively.
Those three taxes account for more than 70 percent of state collections. In most states the revenue figures were for the 12 months ending in June.
Weak state economies were found in all regions of the country, but New England and mid-Atlantic states were in the worst shape, the report said.
In five states, revenue was lower than in the corresponding period a year earlier: Maine, Massachusetts, Michigan, New Hampshire and New York.
Eighteen other states had increases of less than 5 percent, the approximate rate of inflation used in the report.
They were: Alabama, Colorado, Florida, Iowa, Kansas, Maryland, Mississippi, Nebraska, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and Virginia.
Only eight states had revenue increases of 10 percent or more: Georgia, Idaho, Illinois, Louisiana, Nevada, North Carolina, West Virginia and Wyoming.
Tax increases enacted since last year have helped boost revenue in some of those states, including Georgia, Illinois and West Virginia.
"Things are even worse than they look when you consider the fact states raised taxes quite a bit last year," Gold said in an interview. "If those tax increases hadn't occurred, the decline in revenues would be even lower."
Thirty states raised taxes last year, about the same number as this year. Twelve of the 1989 increases were large, involving either income or sales taxes.
Gold said last year's tax increases totaled about $5 billion, with $3 billion taking effect this year. That should have been enough to increase the overall revenue figure by about 1.5 percent, he said.
Three states reported decreases in personal income tax collections: Hawaii, which cut its rates, Michigan and New York. But 10 others had increases below the inflation rate.
Maine and Massachusetts reported lower sales tax revenue, and 19 others had increases of 5 percent or less.
Seven states did not provide figures for the study: Alaska, Delaware, North Dakota, South Dakota, Utah, Washington and Wisconsin. The report said several of those states are known to have strong revenue growth -- North Dakota, Utah and Washington.