Pew study shows Alabama economy slow to rebound after recession

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A new study titled Fiscal 50 by the Pew Charitable Trusts, shows that Alabama has one of the slowest economies to rebound after the recession a decade ago.

Growth has been uneven throughout the U.S. with North Dakota being the fastest growing, and Connecticut being the slowest. Alabama was shown as being one of the slowest with an annual growth of only .9 percent since the recession in 2007.

Pew income study
[Photo Credit: Fiscal 50, he Pew Charitable Trust]

The study used personal income estimates, and tax revenue data to track economic trends within each state.

Personal income growth, one of the main resources for tax revenue growth, has been lagging at a historical pace. From 2007 to 2017 it only rose 1.6 percent a year, compared with the 2.6 percent a year over the past 30 years.

“Personal income growth has been uneven over the past decade, tumbling in almost all states in 2009, during the depths of the recession, and falling in most states in 2013 after taxpayers shifted income to avoid a potential federal tax hike. Sluggish growth in 2016 and 2017 reflected personal income drops in a number of states,” said the study.

States in the nation have experienced sluggish growth across the board, with little to no extra tax revenue leaving many states with very little wiggle room in their budget, and some states have not experienced a rebound since the recession at all.

“Nationally, total state tax revenue recovered in mid-2013 from its plunge during the recession but has rebounded more slowly than after the three previous downturns.”

The good news is, nationally, all three major components of personal income; work earnings, transfers (like Social Security benefits), and property income have have risen over the past 10 years, with the effects varying from state to state.