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.
On average, personal income tax represents about one-third of annual state revenues, but makes up well over half of annual revenues in Colorado, Connecticut, Massachusetts, New York, Oregon and Virginia.
