States with the Worst Tax Shortfalls

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Arizona*

Annual tax revenue change: -13.6%
Jan.-Mar. 2008 tax revenue: $1.852 billion
Annual home value change: -5.5%

Arizona was hit hard by the subprime crisis, and its economy has slowed significantly since mid-2006. Lawmakers are trying to make up a $1.9 billion budget shortfall for fiscal 2009 and are considering borrowing $501 million for school construction, pulling money from the "rainy day" fund, and making cuts to the state universities, the Economic Security Dept., and the Arizona Health Care Cost Containment System of the Dept. of Health Services.

*Annual tax revenue change compares revenues for the January-March period in 2008 to the same period a year earlier. Annual home value change compares the first quarter of 2008 to the first quarter of 2007 and was generated by the Office of Federal Housing Enterprise Oversight.

Source: All data from The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York.

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