State lawmakers spent most of their valuable time, even during good economic times, trying to figure out how to fill their budget gaps. Faced with massive budget holes and sharply lower revs, six state legislatures are moving quickly to avoid ending the current fiscal year with disastrous results. They are looking once again to residents to bail them out.
Smart Money: Right now, at least 47 states are facing significant shortfalls in their 2009 and/or 2010 budgets, according to the Center on Budget and Policy Priorities, a think tank in Washington, D.C. And many of those states are looking to tax hikes to help fill the gaps.
“Pretty much everyone is doing poorly,” says Kim Rueben, senior research associate at the Tax Policy Center. “It’s just a question of who’s hurting more than others.”
The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010…
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[I]n some [states], lawmakers are leaving no stone unturned when it comes to finding items or services to tax. New York, for instance, has raised taxes on tobacco, wine and limo services. Meanwhile, Massachusetts is proposing a tax on satellite television service and Georgia lawmakers are proposing a “pole tax” that would charge gentlemen’s club patrons $5 at the door.
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In a testament to California’s grim predicament, one assemblyman’s proposal to legalize marijuana for personal use and allow counties to tax it is gaining public support. It’s one of the “wacky things you might be able to get away with now,” says Rueben.
California, New York, Florida, Massachusetts, Arizona and Nevada, are six states inflicting the biggest tax hikes on residents:
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Images: Smart Money
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