Cost of Government Day (COGD)
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State and Local Spending

State and Local Spending

In 2008, the average American will work 50.5 days to pay for state and local spending.  That is up from 48.9 days just last year, and 44.3 days in 2003.  Consequently, in just the last five years state and local spending has increased by almost 12 percent relative to national income.

Since a low of 42.4 days for state and local spending in 1999, states have increased their spending by 19.1 percent relative to national income.  This runaway explosion in state and local spending is the main reason COGD increased by four days over last year.  Following the election of more governors and legislators advocating higher spending in 2006, state and local spending has increased by 13.5 percent relative to the economy.

State and Local Spending Soars

State Tax Increases

Given that most states increased taxes to continue spending during the economic slowdown, ATRF has compiled a list of state tax increases by state from FY 2002 to FY 2008.  This list is based on data from the National Governor’s Association, with two adjustments.  First, we compounded the tax increases to reflect hikes adopted since 2002 which have to be paid in successive years.  Second, we adjusted each state’s tax increases by population to produce a better comparison across states.

The index shows that New Jersey continues to overwhelmingly lead all states in terms of tax increases.  The Garden State government increased taxes on each resident by $2,601 since FY 2002, for a total tax increase of over $22 billion.  On a per capita basis, residents in Connecticut, Nevada, Rhode Island and New York also suffered per capita tax increases of over $1,000 over this period.

Six states, led by Idaho and Florida, reduced taxes from FY 2002 through FY 2008.  The others are Hawaii, Arizona, Iowa, and Louisiana.

State Tax Increases Compounded Per Capita FY 2002-FY2008

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