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Is your state going broke—and what does it mean for you? The deepening economic crisis is having disastrous impacts on state budgets and forcing even wealthy states to raise taxes and make substantial program cuts. Just this week, New York Governor David Paterson proposed $4 billion in tax and fee increases and $9 billion in program cuts, including aid to New York City and other municipalities, as he tries to close an expected $15 billion budget shortfall.
At least 43 states faced shortfalls in this year's budget and/or next year's budget, according to Washington research group Center on Budget & Policy Priorities, which recently completed a study on the shortfalls. States that have already raised taxes, dipped into reserves, and slashed programs to balance budgets now have to consider additional cuts because of lower-than-expected revenues. Thirty-seven states face such midyear fiscal 2009 gaps. And many states that have made projections for the 2010 fiscal year expect much more serious problems ahead.
The impact of the recession on this year's budgets is already as bad as the last recession in the early 2000s, according to the report. "In states facing budget gaps, the consequences are severe for the residents as well as the economy," the report reads. Budget "difficulties are leading some 25 states to reduce services to their residents, including some of their most vulnerable families."
The data in this slide show are based on information collected by the Center on Budget & Policy Priorities through Dec. 7 and show the states that have seen the biggest shortfalls in tax revenue in their fiscal 2009 budgets.
Editor's note: The "total gap" includes the shortfalls before the budget was adopted, along with any additional midyear gaps. Most of the states on the list have a fiscal year that begins on July 1. The exceptions include New York, which has a fiscal year beginning on Apr 1; Michigan and Alabama, which start their fiscal years on Oct. 1; and Texas, which starts its fiscal year on Sept. 1.
Read on to find out the 20 states with the biggest budget shortfalls.
Source: Center on Budget & Policy Priorities
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