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- iHaveNet.com: Politics
by Danielle Kurtzleben
Illinois Gov. Patrick Quinn approved tax increases to fight the red ink
The federal deficit was a major talking point in the 2010 elections, with Republican candidates in particular touting the virtues of "fiscal responsibility" and the need for cutting spending.
Indeed, the federal deficit has grown at breakneck pace: since the surpluses of the late 1990s and early
2000s, the deficit has swollen considerably, exceeding
Yet despite receiving less national attention, state budget deficits are also creating precarious fiscal situations nationwide. Falling tax revenue and the end of federal Recovery Act assistance may make the coming fiscal year the most difficult yet for many U.S. states. In Illinois, which is facing some of the worst fiscal troubles in the nation, Democratic Gov. Patrick Quinn approved tax hikes to fight the red ink, increasing personal income tax rates from 3 to 5 percent, and business income taxes from 7.3 to 9.5 percent.
Before they pass budgets, states project their revenues and outlays for the coming fiscal year. Every
state except Vermont has a balanced budget law in one form or another, so legislators
must close any gap between revenues and outlays before they can pass a formal budget. Cumulatively,
those state budget gaps have grown to staggering levels during the current recession. Fiscal year 2010
saw the largest state deficit total ever, with
Phil Oliff, a policy analyst at the
Below are the 10 states that are projecting the largest shortfalls for FY 2012.
State | Shortfall (Millions $) |
---|---|
Source: Center for Budget and Policy Priorities | |
California | 21,300 |
Illinois | 17,000 |
New Jersey | 10,500 |
Texas | 10,000 |
New York | 8,200 |
Connecticut | 3,800 |
Minnesota | 3,800 |
North Carolina | 3,000 |
Ohio | 3,000 |
Florida (tie) | 2,500 |
Oregon (tie) | 2,500 |
When viewed as a percentage of the full state budget, the task of closing these budget gaps can appear
even more daunting. In Illinois, for example, the
Below are the ten states with the largest projected 2012 shortfalls, relative to their most recent budgets.
State | Shortfall (Millions $) | Percentage |
---|---|---|
Source: Center for Budget and Policy Priorities | ||
Illinois | 17,000 | 52.3 |
New Jersey | 10,500 | 37.5 |
Nevada | 1,300 | 36.7 |
Mississippi | 1,200 | 27.6 |
South Carolina | 1,300 | 26.1 |
California | 21,300 | 25.7 |
Minnesota | 3,800 | 25 |
Texas | 10,000 | 22.3 |
Connecticut | 3,800 | 21.6 |
Louisiana | 1,700 | 21.2 |
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