Cash-Strapped States Raise Taxes as Revenue Declines

A precipitous decline in tax revenue has at least 10 states considering major increases in sales or income taxes to close budget gaps that in some cases run into the billions, the Wall Street Journal reports. States like Oregon, facing a $4.4 billion budget gap and 10.8% unemployment, have few other options for boosting revenue. Tax revenues are projected to decline by as much as one-third this year.

"Income taxes and sales taxes are the go-to taxes when you really need to raise a lot of money," said one expert. California and New York have already imposed multibillion-dollar increases, and several other states are expected to do the same after the April 15 income tax deadline. "The problem is that they are filling a hole that has gotten a little deeper," said one budget expert.
(More income tax stories.)