Total state tax revenue collections increased 24.1 percent in nominal terms and 17.2 percent in real terms in the fourth quarter of 2021 relative to a year earlier.

Although state revenue collections have grown rapidly in the most recent months and reported revenue growth is widespread across states and among various revenue sources, these trends must be viewed with caution. The recent surge in state tax revenues is largely attributable to factors that may be temporary and likely to slow down in the coming months.

The state fiscal outlook remains positive in the near term, but we expect to see less volatility and weakened growth in state revenues in the coming months, absent any further external shocks.