Reduced tax collections is strongly associated with reduced spending: Change ($) in per capita state and local taxes and spending, 2000–2007 and 2007–2019

Change in taxes Change in spending
-$477.51 $204.16
-208.28 328.01
-72.18 494.21
-6.48 642.88
35.52 523.35
87.43 1,161.38
138.24 870.03
182.66 1,154.89
202.33 1,160.13
223.37 628.52
254.87 744.21
271.07 885.32
296.43 1,149.02
344.22 993.12
394.34 1,371.70
427.28 1,215.67
606.75 1,230.09
703.11 1,165.65
874.08 2,320.61
1,749.70 1,827.72

Notes: Figure is a binned scatterplot that ranks state changes in taxes between 2000 and 2007 and between 2007 and 2019, and then groups these state-specific changes into similarly sized bins” of changes. States include D.C. If data allow for an exactly equal number of observations in each bin, then the number of observations in each bin is equal. If the data are unequal, bins are constructed using default settings on Stata binscatter command. Each bin’s average change in taxes and spending is then compared in the graph. Because it is an outlier on both taxes and spending, Alaska is omitted. Including it would strengthen the association. 

Source: Underlying data are from the Census of State and Local Government Finance. Interactive tool from Urban Institute used to access data in March 2022.  

View the underlying data on epi.org.