Firstly, let's review each state's 2010 state budget, projected deficit and its percentage as follows.
- Below list is based on the size of state budget. You can see that large budget size of large GDP states such as California, New York, Texas, New Jersey, etc....
- Ranking of states with largest projected budget deficit are; 1) Californial 2) Nevada; 3) Arizona; 4) New York; 5) Illinois; 6)Connecticut; 7) Florida; 8) Washington; 9) Wisconsin; 10) Louisiana. High-cost/large economy state such as CA/NY and real estate bubble burst states such as NV/FL/AR are leading the pack.
- Ranking of states with smallest projected budget deficit are; 1) South Dakota, 2) Arkansas; 3) Nebraska; 4) West Virginia; 5) Indiana; 6) New Mexico; 7) Maine; 8) Alabama; 9) Michigan; 10) Ohio; 11) Texas. Small states that are located inland (away from east/west coast) are faring very well (though I was very surprised about Michigan's low deficit projection).
| States | Budget | Deficit | Percentage |
| All States Total | $ 705.82 | $ 133.40 | 18.90% |
| California | $ 101.19 | $ 33.90 | 33.50% |
| New York | $ 61.72 | $ 17.90 | 29.00% |
| Texas | $ 46.05 | $ 3.50 | 7.60% |
| New Jersey | $ 32.41 | $ 7.00 | 21.60% |
| Pennsylvania | $ 28.57 | $ 4.80 | 16.80% |
| Illinois | $ 28.34 | $ 7.00 | 24.70% |
| Ohio | $ 28.17 | $ 2.00 | 7.10% |
| Massachusetts | $ 28.09 | $ 5.00 | 17.80% |
| Florida | $ 25.66 | $ 5.80 | 22.60% |
| Michigan | $ 23.19 | $ 1.60 | 6.90% |
| North Carolina | $ 21.50 | $ 4.60 | 21.40% |
| Georgia | $ 21.38 | $ 3.10 | 14.50% |
| Minnesota | $ 17.49 | $ 3.20 | 18.30% |
| Virginia | $ 17.31 | $ 1.80 | 10.40% |
| Connecticut | $ 17.30 | $ 4.10 | 23.70% |
| Maryland | $ 15.20 | $ 1.90 | 12.50% |
| Washington | $ 15.04 | $ 3.40 | 22.60% |
| Wisconsin | $ 14.22 | $ 3.20 | 22.50% |
| Indiana | $ 13.16 | $ 0.72 | 5.50% |
| South Dakota | $ 11.85 | $ 0.32 | 2.70% |
| Tennessee | $ 11.11 | $ 1.00 | 9.00% |
| Arizona | $ 10.07 | $ 3.00 | 29.80% |
| Kentucky | $ 9.30 | $ 0.82 | 8.80% |
| Louisiana | $ 9.22 | $ 2.00 | 21.70% |
| Missouri | $ 8.96 | $ 0.92 | 10.30% |
| Alabama | $ 8.31 | $ 0.54 | 6.50% |
| Colorado | $ 7.69 | $ 1.00 | 13.00% |
| South Carolina | $ 6.90 | $ 0.73 | 10.50% |
| Kansas | $ 6.59 | $ 1.10 | 16.70% |
| Oklahoma | $ 6.52 | $ 0.60 | 9.20% |
| Iowa | $ 6.39 | $ 0.78 | 12.20% |
| District of Columbia | $ 6.25 | $ 0.65 | 10.40% |
| New Mexico | $ 6.05 | $ 0.35 | 5.70% |
| Utah | $ 5.96 | $ 0.72 | 12.10% |
| Hawaii | $ 5.73 | $ 0.68 | 11.90% |
| Mississippi | $ 5.11 | $ 0.48 | 9.40% |
| Arkansas | $ 4.56 | $ 0.15 | 3.20% |
| West Virginia | $ 3.92 | $ 0.20 | 5.10% |
| Nevada | $ 3.79 | $ 1.20 | 31.70% |
| Delaware | $ 3.64 | $ 0.56 | 15.30% |
| Nebraska | $ 3.53 | $ 0.15 | 4.30% |
| Rhode Island | $ 3.28 | $ 0.45 | 13.70% |
| Maine | $ 3.05 | $ 0.18 | 5.80% |
| Idaho | $ 2.96 | $ 0.41 | 13.90% |
| New Hampshire | $ 1.55 | $ 0.25 | 16.10% |
| Vermont | $ 1.22 | $ 0.25 | 20.80% |
| Oregon | DK | DK | DK |
* By the way, as you can see from above, California's budget deficit in 2010 is projected around $34 billion. California is making approx. $250 billion in Federal tax payment and get only 80% return. It means California overpays approx. $50 billion in Federal tax, more than enough to fill the 2010 state budget deficit!
Then, let's look at 2009 State Business Tax Climate Index.
Below is the states with WORST tax climate.
1. New Jersey
2. New York
3. California
4. Ohio
5. Rhode Island
6. Maryland
7. Iowa
8. Vermont
9. Nebraska
10. Minnesota
In large states like CA/NY, states government have very high operating expense so they are charging very high tax to residents and business. As results, massive out-migration from California and New York is happening right now.
2. New York
3. California
4. Ohio
5. Rhode Island
6. Maryland
7. Iowa
8. Vermont
9. Nebraska
10. Minnesota
Here is the ranking of the most favorable tax states. Many states in the top 10 has are ones without state personal income tax such as Wyoming, South Dakoda, Nevada, Florida and Texas.
1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. Montana
7. Texas
8. New Hampshire
9. Oregon
10. Delaware
This proves my argument --- "Why Californians are charged too much state tax?" No wonder so many high income family are paying almost 50% of their income on both federal and state tax!
In addition, California and New York started enforcing more tax to fill the budget deficit.
"6 States Hitting Residents With Big Tax Hikes" - WSJ.com
http://bit.ly/G2Edo
This will further accelerate the out-migration from California and New York to the low tax - strong economy state like Texas and delay the recovery from recession. In order to maintain long-term strength, California (and New York) has to stop raising tax, cut state budget and downsize service and operations.
Or should California (and New York) go separate ways from United States of America?
What do you think?
Happy Investing!!!!
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