WASHINGTON, Jan. 6 (UPI) -- Already bruised states were battered by the recession and lost about a third of their revenue in 2009, the U.S. Census Bureau said.
In a report released Wednesday, the bureau said the plunge in revenue mainly came from investment losses experienced by state investment funds during the worst of the economic downturn, The Washington Post reported. Also, tax revenues fell as assistance demands rose.
Overall, total state government revenue fell 30.8 percent, to $1.1 trillion, between fiscal years 2008 and 2009, the report said.
The economy has improved and tax revenue has begun to inch upward, the report said. Still, the recession's lingering effects, particularly a high national unemployment rate, left the majority of states with large budget deficits and increasing service demands.
Next year "will actually be the most difficult budget year for states ever," said Nicholas Johnson, director of the state fiscal project at the Center on Budget and Policy Priorities in Washington. "If you look at the gap between the cost of providing public services and the revenue available to provide them, it remains very large."
Forty-six states reported having to raise taxes and cut services and personnel in their current budgets, the center said.
Forty states projected budget gaps totaling $113 billion for next year.
