View from the Observation Deck

1. Owners of municipal bonds should take some comfort in knowing that state tax receipts have rebounded in a meaningful way in recent quarters.
2. Revenues rose 10.8% (y-o-y) in Q2'11. That is a substantial improvement over the situation in Q2'09, where revenues declined by 16.3% (y-o-y).
3. State tax receipts have increased for six consecutive quarters. The average rate of nominal growth was 6.6%.
4. Prior to the rebound, collections were down five consecutive quarters (Q4'08 – Q4'09). The average rate of nominal decline was 9.3%.
5. For the 12-month period ended June 2011, total collections exceeded the previous 12-month period by $58 billion, or 8.4%, according to Rockinst.org.
6. That represents the strongest showing since 2005.