Recession hit state revenues hard, Census data shows

New U.S. Census Bureau data shows the national recession took a huge bite out of state government revenues.

Total taxes collected by U.S. states plunged 31 percent, dropping to $1.1 trillion in 2009 compared to $1.6 trillion in the previous year.

The large decrease in total revenue was mainly caused by the substantial declines in social insurance trust revenue, which is made up of four categories - public employee retirement, unemployment compensation, workers compensation and other insurance trusts like Social Security, Medicare, veteran's life insurance.

While tax revenue declined substantially, total federal grants to states increased 12.9 percent to $477.7 billion, according to the latest census data. Federal grants for welfare programs made up 59.3 percent of all federal grants received in 2009 and increased 16.3 percent to $283.3 billion over 2008, compared with only 4.3 and 4.0 percent year-to-year increases in 2008 and 2007, respectively.

General expenditures by state governments rose 3 percent in 2009 over 2008, totaling more than $1.5 trillion with spending for education at $562.1 billion, public welfare at $437.5 billion and health and hospitals at $119.1 billion, according to the census report issued Wednesday.

For the 42 states with lotteries, ticket sales totaled $52.3 billion in 2009, compared with $52.7 billion in 2008. Lottery prizes awarded totaled

$32.2 billion and lottery proceeds were $17.7 billion. The top three states in lottery ticket sales were New York at $6.8 billion, Massachusetts at $4.2 billion, and Florida at $3.7 billion.

More detailed information is available at http://www.census.gov/newsroom/releases/archives/governments/cb11-03.html