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THURSDAY, NOVEMBER 26, 2009
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Cash-Strapped States Raise Taxes as Revenue Declines

At least 10 states face substantial budget gaps

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(Newser) – 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.

A for sale sign hangs in front of a Homestead, Fla. home. In states hit hardest by the recession, tax revenues are falling so quickly that lawmakers will likely raise taxes to close budget gaps.
A for sale sign hangs in front of a Homestead, Fla. home. In states hit hardest by the recession, tax revenues are falling so quickly that lawmakers will likely raise taxes to close budget gaps.   (AP Photo/J Pat Carter)
Nebraska state senators are seen in the legislative chamber during debate, in Lincoln, Neb. Many state legislatures will have to consider raising taxes this year to close budget gaps.
Nebraska state senators are seen in the legislative chamber during debate, in Lincoln, Neb. Many state legislatures will have to consider raising taxes this year to close budget gaps.   (AP Photo/Nati Harnik)
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Income taxes and sales taxes are the go-to taxes when you really need to raise a lot of money.
- Donald J. Boyd, Rockefeller Institute of Government in Albany, N.Y.

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2 comments
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Derni
Apr 9, 09 5:23 PM CDT
so much for the STIMULUS package-now we send the few dollars we get back to the State-wages don't keep up-Won't be much of a recovery Reply
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radnip
Apr 9, 09 9:22 PM CDT
I thought raising revenues was "cut taxes for the rich, which then trickles-down to jobs for everyone, who then buy the goods already produced (you'd better like them), and then the government gets money"? Reply
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