Using Income Taxes To Address State Budget Shortfalls

Source: Elizabeth McNichol and Andrew Nicholas, Center on Budget and Policy Priorities, February 21, 2008

States are on the brink of their worst fiscal problems since the 2001 recession. At least half the states are anticipating budget shortfalls for next year (fiscal year 2009). For those states that have estimated the size of the gap, estimated deficits range from $34 billion to $38 billion in total. Among affected states, these deficits represent between 8 percent and 9 percent of total state expenditures.

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