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Kentucky not alone in tax hikes this year

December 4, 2009

Gov. Steve Beshear and other legislative leaders have said tax increases are not likely during the 2010 legislative session.

But that wasn’t the case earlier this year when the Kentucky General Assembly increased the state’s tobacco and alcohol taxes to help offset slumping revenue numbers.

Kentucky wasn’t alone this year in turning to tax increases to help fill quickly depleted state coffers, as Stateline.org’s Daniel Vock reports today.

From the Stateline article

Twenty-nine states raised taxes or fees this year, bringing in an estimated $23.9 billion — the highest increase since at least 1979, according to data released this week. The reliance on so much new revenue is sudden, to say the least. In the previous year, tax and fee hikes totaled $1.5 billion.

That’s the word from the National Governors Association and the National Association of State Budget Officers, which together issued a state-by-state tally of actions taken to close ever-expanding budget gaps and balance state spending plans.

A PDF of the report offers a state-by-state analysis of changes in tax law for the current fiscal year.

Among the other interesting findings  –

Forty-three states reduced their enacted budgets in fiscal 2009 by $31.3 billion while 36 states cut their fiscal 2010 expenditures by $55.7 billion.

These cuts are in stark contrast to the thirteen states that had to reduce their enacted budgets in fiscal 2008 and the three states that reduced their enacted budgets during 2007.

During the last fiscal downturn, the peak years of reductions to enacted budgets occurred in fiscal 2002 and fiscal 2003, well after the national recession had ended and only totaled $14 billion and $12 billion, respectively.

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