Nearly one-fifth of the state’s general fund revenues eroded in the 2009 fiscal year, the largest decline on record since World War II.
New revenue figures show the state was short nearly $479 million in fiscal 2009, which ended June 30. Federal stimulus money will be used to backfill about $250 million of that shortfall, and another $229 million will have to be addressed in the fiscal 2010 budget.
The dramatic budget deficits that resulted from lower revenues will make larger what was already a monstrous deficit in this year’s deficit. The state already was looking at a $3.2 billion deficit in this year’s budget, the Joint Legislative Budget Committee reported in its monthly update of state revenues.
A pair of emergency budget revisions earlier this year weren’t enough to keep the 2009 spending plan from going into the red.
Lawmakers revised revenue projections in January, when they approved the first round of budget revisions to close a $1.6 billion hole. Still, as the economy deteriorated in the spring, tax collections continued to decline and expenses came in slightly higher. In all, the shortfall ballooned to $2.8 billion by the end of fiscal 2009.
The 2009 revenues were $1.3 billion less than in 2008, a decrease of 18.4 percent, the largest dollar and percentage decline in revenues going back to World War II.
Tax collections in all categories were substantially less than in the prior year. Sales taxes, which account for nearly half of all state revenues, were down 13.7 percent over 2008, the second consecutive year in which sales tax collections declined.
Income taxes on individuals dropped 24.6 percent in 2009, the largest decrease on record. Corporate income taxes were off 24.5 percent from the prior year