States racing to cobble together new budgets for their July 1 deadline could find themselves sinking back into red ink sooner than they think, as Americans’ income and the taxes they pay on it shrink, new data show.
Personal income taxes paid to the states plummeted 26 percent, or $28.8 billion, in the first four months of 2009, compared with the same time period last year, the Nelson A. Rockefeller Institute of Government said in its June 18 report.
The federal government found similar bleak news, with overall personal income falling in 37 states in the first quarter of 2009. Job losses, lower interest rates and smaller corporate dividend payments all helped to push personal income down, the U.S. Bureau of Economic Analysis said in a June 18 report.
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