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Jan. 28 (Bloomberg) -- Half of U.S. states are projecting budget deficits next fiscal year as the slowing economy curbs tax collections, forcing local governments to spend savings, cut funding for programs, borrow or raise taxes, a report found.
The Center on Budget and Policy Priorities, a Washington- based research group, said that the shortfalls are estimated to total $31.7 billion to $34.5 billion in 19 states, an amount equal to at least 8 percent of their spending, with unspecified gaps forecast in another six. The number is up from December, when the group found 13 states anticipated deficits.
Declining sales of homes and the first drop in prices in at least four decades has damped consumer spending and job growth, eroding the sales and income taxes that fund state governments. In California, Governor Arnold Schwarzenegger proposed releasing inmates early and closing state parks, among other steps.
``The bursting of the housing bubble has reduced state sales tax revenue collections from sales of furniture, appliances, construction materials, and the like,'' the center said in its report. ``If the employment situation continues to deteriorate, income tax revenues will weaken and there will be further downward pressure on sales tax revenues as consumers become reluctant or unable to spend.''
forcing local governments to spend savings, cut funding for programs, borrow or raise taxes, a report found.
My taxes have increased 300% in less than 10 years and I'm now paying more than $200 a month in property tax. My original mortgage was less than $250 a month, so I'm basically paying the government a second mortgage on my home. I just can't wait for the next increase.