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State Tax Increases
Given that most states increased taxes to continue spending during the economic downturn ATR has also compiled a list of state tax increases by state for the past six years. ATR made two adjustments to the data from the National Governor’s Association. First, we compounded the tax increases to reflect tax increases made in 2002 which have to be paid in the successive years. Second, we adjusted each state by population to have a better comparison across states.
New Jersey led all states with tax increases by an overwhelming margin. The more than $17 billion of state tax increases totaled $1,951 per resident. Nevada, Connecticut, and Ohio also increased taxes by more than $1,000 per resident in fiscal years 2002-2007. However, it should be noted, the difference between the highest tax state, New Jersey, and the second highest tax state is 75 percent, indicating that the tax increases in New Jersey were excessive.
These tax increases have also come at a time when the federal government has nearly doubled its aid to state and local governments. The 11 percent growth of federal aid per year during this time period further suggests that states continue to raise taxes to match their overspending pattern.
Six states reduced taxes during this time led by Idaho and followed by Hawaii, Florida, Wyoming, and Louisiana. In addition, a number of states such as Oklahoma and Rhode Island cut taxes in the current fiscal year and we expect more in the next fiscal year.
State Tax Increases Compounded Per Capita FY 2002-FY 2007
State |
Total $ Amount |
Per Capita |
State |
Total $ Amount |
Per Capita |
New Jersey |
17,009,900,000 |
1951.14 |
North Dakota |
106,800,000 |
167.75 |
Nevada |
2,681,200,000 |
1110.32 |
Washington |
878,200,000 |
139.67 |
Connecticut |
3,840,400,000 |
1094.04 |
Oklahoma |
493,200,000 |
139.01 |
Ohio |
12,421,800,000 |
1083.54 |
Alabama |
484,800,000 |
106.37 |
New York |
18,368,300,000 |
953.97 |
Wisconsin |
578,600,000 |
104.51 |
Rhode Island |
972,700,000 |
903.84 |
South Carolina |
442,600,000 |
104.02 |
Alaska |
554,900,000 |
836.12 |
Montana |
85,600,000 |
91.49 |
Indiana |
5,142,200,000 |
819.87 |
Kentucky |
361,200,000 |
86.55 |
Tennessee |
4,655,000,000 |
780.65 |
Utah |
182,900,000 |
74.06 |
Delaware |
574,200,000 |
680.72 |
Colorado |
317,600,000 |
68.08 |
Minnesota |
3,383,900,000 |
659.27 |
South Dakota |
51,000,000 |
65.73 |
North Carolina |
5,067,900,000 |
583.64 |
Georgia |
418,200,000 |
46.09 |
Oregon |
2,083,200,000 |
572.14 |
Pennsylvania |
541,900,000 |
43.60 |
Vermont |
347,700,000 |
558.06 |
Missouri |
230,900,000 |
39.81 |
Kansas |
1,430,300,000 |
521.12 |
California |
1,144,700,000 |
31.68 |
Massachusetts |
3,124,600,000 |
488.31 |
West Virginia |
43,000,000 |
23.67 |
Illinois |
5,709,000,000 |
447.30 |
Texas |
124,100,000 |
5.43 |
New Hampshire |
471,000,000 |
359.56 |
Mississippi |
10,000,000 |
3.42 |
Virginia |
2,713,600,000 |
358.59 |
Iowa |
3,100,000 |
1.05 |
Nebraska |
559,300,000 |
318.00 |
Arizona |
-1,600,000 |
-0.27 |
Michigan |
2,891,200,000 |
285.67 |
Louisiana |
-51,900,000 |
-11.47 |
Maryland |
1,504,900,000 |
268.71 |
Wyoming |
-51,600,000 |
-101.32 |
New Mexico |
501,400,000 |
260.01 |
Florida |
-3,130,400,000 |
-175.97 |
Maine |
343,300,000 |
259.78 |
Hawaii |
-265,300,000 |
-208.05 |
Arkansas |
467,600,000 |
168.25 |
Idaho |
-300,900,000 |
-210.55 |
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