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California tops the list of the 10 states in the deepest financial hole. But not by much. Arizona is a close second. (For more on the state and local budget crisis, higher taxes, and the effect on the economic recovery see my post http://jubakpicks.com/2009/11/10/will-rising-state-taxes-sink-the-recovery-in-2010-and-then-there-are-coming-federal-tax-increases-in-2011-and-beyond/ )

The Pew Center on the States put together the list by ranking states on the percentage change in revenue from the first quarter of 2008 to the first quarter of 2009 and by the size of the budget gap for fiscal 2010—that the fiscal year that ends in June 2010 for many states—creating by those drops in tax revenue. (And by looking at other factors not included in the table below. To see more follow this link to the full study http://www.pewcenteronthestates.org/uploadedFiles/wwwpewcenteronthestatesorg/BeyondCalifornia.pdf )

Here’s the list:

  1. California          16.2% drop in tax revenue      49.3% size of gap
  2. Arizona              16.5% drop                                   41.1% gap
  3. Rhode Island   12.5% drop                                   19.2% gap
  4. Michigan           16.5% drop                                   12% gap
  5. Oregon               19.0% drop                                   14.5% gap
  6. Nevada               1.5% increase                             37.8% gap
  7. Florida               11.5% drop                                   22.8% gap
  8. New Jersey      15.8% drop                                   29.9% gap
  9. Illinois               10.9% drop                                 47.3% gap
  10. Wisconsin        11.2% drop                                  23.2% gap

The average for all 50 states, according to the Pew Center, is an 11.7% drop in tax revenue and a 17.7% budget gap.