Census Bureau Reports Collapse In State Tax Revenue, Liquor Stores Only Bright Spot

Hopefully the administration by now has realized that unless it wants uprisings (either metaphoric or literal ones) it has to tackle the state situation. As today's Census Bureau update points out, and corroborates our earlier findings on the withoolding tax plunge, usually used to fill both State and Federal coffers, total state revenues dropped by 16% to $1.678 trillion, even as total expenses increased by 6.2% to $1.736 trillion.

Here are the highlights from the Census Bureau itself:

State governments took in nearly $1.7 trillion in total revenues in fiscal year 2008, a 15.8 percent decrease from 2007, according to new data on state government finances released by the U.S. Census Bureau. The largest share of those revenues came from taxes ($780.7 billion), which made up 46.5 percent. The decline was primarily because of a decrease in insurance trust revenue, which fell by $377.7 billion (72.7 percent).


Insurance trust systems are comprised of public employee retirement systems, the unemployment compensation system, state government workers’ compensation programs and other state social insurance trusts.


Total state government expenditures increased 6.2 percent from fiscal year 2007, totaling slightly more than $1.7 trillion in 2008. Education ($546.8 billion), public welfare ($412.1 billion) and highways ($107.2 billion) represented the top three outlays, accounting for nearly two-thirds of all state government total expenditures.


The findings come from the 2008 Annual Survey of State Government Finances, which includes data on revenues, expenditures, debt, and cash and security holdings for each state, as well as a national level summary. The major source of these finance statistics is the governments’ own accounting systems, either directly from a government’s own records or through intermediate reporting systems.


Eleven states spent more than 25 percent of total expenditures on public welfare, with Tennessee (32.8 percent), Maine (30.5 percent) and Rhode Island (29.8 percent) spending the highest percentage of their total expenditures. (See table) (Excel).


Public welfare spending is used to support people based on need and includes such items as old-age assistance, temporary assistance for needy families, and commodities and services provided under welfare programs, including medical care or burial services.

Hawaii (11.5 percent), Alabama (10.1 percent) and South Carolina (9.9 percent) led in spending on public health and hospitals as a percentage of total expenditures.


In addition to state taxes, state lotteries were another way many state governments (including Washington, D.C.) raised revenue in 2008. Total state lottery ticket sales reached $77.3 billion in 2008, an increase of 1.8 percent from 2007. Lottery prize payouts represented $56.7 billion in expenditures, a 1.4 percent increase over the previous year. And lottery proceeds represented $18.2 billion in state government revenue, an increase of 2.9 percent. New York ($2.7 billion), Florida ($1.4 billion) and California ($1.2 billion) led the nation in lottery proceeds.

The one bright spot: Liquor store revenues. Too bad there is no way for Obama to spin this off in a (Goldman underwritten) IPO.