ARKANSAS STILL RANKS 49TH DESPITE TAX INCREASES LINKED TO INCOME GROWTH

(August 2005) Arkansas ranks 49th in per capita personal income according to 2004 preliminary data released by the U.S. Bureau of Economic Analysis (BEA). Arkansas has not improved its second-to-last place rank, ahead of only Mississippi, despite record tax increases linked by proponents to income and economic growth.

Arkansas per capita personal income for 2004 was $25,725, or 0.78 percent of the U.S. ($32,937). Mississippi, which ranks 50th, had a per capita personal income of $24,650, or 0.75 percent of the U.S. Both states were well below the Southeast region ($29,769).

Per capita personal income in Arkansas was 0.75 percent of the U.S. in 1983 when then-Gov. Bill Clinton linked a 33 percent sales tax increase to income and economic growth. (Arkansas Gazette: June 1, Aug. 25, Sept. 20-21, Oct.14, 1983 and Aug. 1, 1984). The tax increase did not improve Arkansas’ long-term per capita rank.

By contrast, Mississippi per capita personal income has grown at a rate greater than Arkansas’. Per capita personal income in Mississippi was 0.68 percent of the U.S. (1983) and 0.75 percent (2004).

BEA calculates per capita personal income by dividing the personal income of the residents of a given area by the resident population using Census Bureau annual midyear population estimates. Following are state rankings based on the 2004 preliminary data.

State Rankings, Per Capita Personal Income (2004)

Connecticut $45,398
Massachusetts $41,801
New Jersey $41,332
Maryland $39,247
New York $38,228
New Hampshire $37,040
Colorado $36,063
Delaware $35,861
Minnesota $35,861
Virginia $35,477
Washington $35,299
California $35,019
Alaska $34,454
Illinois $34,351
Wyoming $34,306
Rhode Island $33,733
Nevada $33,405
Pennsylvania $33,348
United States $32,937
Vermont $32,770
Hawaii $32,160
Wisconsin $32,157
Michigan $31,954
Florida $31,455
North Dakota $31,398
Nebraska $31,339
Ohio $31,322
South Dakota $30,856
Kansas $30,811
Missouri $30,608
Maine $30,566
Iowa $30,560
Texas $30,222
Indiana $30,094
Georgia $30,051
Tennessee $30,005
Oregon $29,971
North Carolina $29,246
Arizona $28,442
Oklahoma $28,089
Alabama $27,795
Kentucky $27,709
Louisiana $27,581
South Carolina $27,172
Idaho $27,098
Montana $26,857
Utah $26,606
New Mexico $26,191
West Virginia $25,872
Arkansas $25,725
Mississippi $24,650

(Source: BEA)