State sales taxes continue to rise

If you flip on the news or thumb through a newspaper these days, it's no secret that the federal government is facing a mounting deficit. Spending has outstripped revenues for years now, and the current recession has cut deeply into the biggest source of income: taxpayers.

What hasn't been touted as much is how the same financial crisis is affecting states. As the federal government cuts back on funding state projects (although many, such as those related to education and homeland security, are mandated by the feds), states are scrambling to make up the difference.

Unfortunately, like the federal government, states are facing a similar dilemma: too much spending compared to revenue. The result? In the current fiscal year, at least 41 states are facing budget shortfalls in the current fiscal year. Even worse? Unlike the federal government, many state governments have laws on the books requiring that states operate in the black. Those "shutdowns" you keep hearing about? It's often because the state isn't allowed to spend money it doesn't have (apparently, a novel concept in government).