While the market is showing signs of recovery from the “Great Recession” most state budgets have been feeling the squeeze from the lag in recovery. In a recent article titled The Sorry State of Finances, Liam Denning explained that, “55% of state revenue, before federal transfers, comes from personal and corporate income tax.” Denning also stated that, “the first three quarters of 2009 were the worst for state tax since at least 1963.”
There is an apparent lag between recovery in the private sector and a state receiving tax revenue. So what can states do about this problem while they suffer in the red? Mr. Denning said, “Since states can’t run general funding deficits, closing gaps mean raising taxes, cutting services and resorting to one-time measures.” Mr. Denning’s list of solutions is certainly accurate, but does it include all options that states have? What about employing new technology to discover fraud or recover uncollected revenue?
The many disparate systems, data silos, and various records throughout any single Department of Revenue can result in missed revenue opportunities. Using technology to integrate these various systems and records to obtain a single view of tax payer across these systems is a first step in recovering lost revenue—refilling those coffers!
In a recent webinar Government Technology presented how new technology can be used for improving data quality to reduce fraud and increase revenue.
Are there other ways states can use technology to refill their coffers?